Development Speeding Up in Downtown But Not in Natomas
The “available” signs on vacant lots and office complexes around Sleeptrain Arena have been there since the heart of the recession. One of the signs belongs to Cassidy Turley Commercial Real Estate Services. Garrick Brown is the company’s research director. He says Natomas is primed for single-family home construction:
“The demand is creeping up. In a market like that where there’s kind of an over-built commercial market- that is the product that could be built that would find tenants or owners.”
Brown says residential development would drive demand for more commercial development like a power center with big box stores. But there aren’t enough residents to support commercial construction now.
Interest in developing downtown Sacramento has increased dramatically since a group of investors bought the Sacramento Kings. The group agreed to help the city build an arena at the Downtown Plaza.
But, near the Kings’ current home of Sleeptrain Arena, the number of vacancies is high and development interest is low according to Brown. The options of re-using the arena or demolishing it doesn't change that.
“In the Case of Sleeptrain going away, it does clear the room for more future development, but as far as where the market’s going to be in terms of demand for future development there, I think we’re at least four years away.”
Part of the problem is the building moratorium in Natomas instituted by the U.S. Army Corps of Engineers because of levee concerns.
According to first quarter analysis done by Cassidy Turley, Natomas has the third highest office and fourth highest industrial vacancy rates in any area from Davis to Auburn.