The following reflects Sacramento industrial market conditions as of Q3 2026.
MARKET DRIVERS
Sacramento’s industrial vacancy edged lower in the third quarter, with the direct vacancy rate falling to 6.1%. Space remains available along several major corridors, but positive occupancy gains suggest tenant demand is starting to work through lingering supply.
Total availability held at 10.1%, unchanged from the prior quarter, which gives occupiers considerable choice even as conditions tightened slightly. Roughly 1.6M SF is under construction, a pipeline that remains limited relative to the market’s existing inventory and should help restrain new supply.
The average asking rent rose slightly to $0.80/SF NNN, reversing the prior quarter’s decline. Landlords are balancing occupancy goals against tenant expectations, and modest rent movement reflects uneven demand across Sacramento’s industrial submarkets.
Leasing activity totaled approximately 1.8M SF in the third quarter, down from 2.7M SF in the second quarter. Even with slower deal volume, direct net absorption improved to nearly 348,000 SF, led by gains in Power Inn, South Sacramento, and Natomas/Northgate that offset softness in other submarkets.
Investment sales gained momentum, with approximately 3.9M SF trading in the quarter versus 1.2M SF in the second quarter. Dollar volume rose to roughly $416M, pointing to renewed transaction activity despite ongoing pricing and financing considerations.
ECONOMIC REVIEW
The unemployment rate in the Sacramento-Roseville-Folsom MSA rose to 5.2% in August 2026 from 4.2% in May 2026, though it remained slightly below the year-ago rate of 5.4%. By comparison, the rate was 5.1% for California and 4.1% nationally over the same period.
Sacramento’s economy continues to draw investment in emerging industries such as advanced manufacturing, clean technology, and life sciences. Efforts to broaden the region’s business base and strengthen workforce development are helping diversify the local economy and creating added opportunities for industrial growth.
NEAR-TERM OUTLOOK
Sacramento’s industrial fundamentals appear to be improving gradually as direct vacancy declines and occupied space grows. Elevated availability will likely keep competition for tenants active and limit near-term rent acceleration, while a measured construction pipeline should help the market absorb existing space through year-end. Demand across the core distribution submarkets remains an important source of stability.
Investment activity could remain uneven as buyers weigh borrowing costs and asset pricing. Even so, stronger third-quarter transaction volume, the region’s distribution advantages, and comparatively accessible entry pricing may help sustain interest from private and institutional capital.
Frequently Asked Questions
What is the industrial vacancy rate in Sacramento in Q3 2026?
The direct industrial vacancy rate in Sacramento was 6.1% in Q3 2026, down from 6.3% in Q2 2026 and up 33 basis points from 5.8% in Q3 2025, according to Kidder Mathews research. The total vacancy rate was 7.1% across 187,700,822 SF of inventory. West Sacramento (11.2%) and South Sacramento (10.4%) had the highest direct vacancy rates among submarkets. (Data source: CoStar)
What is the industrial availability rate in Sacramento in Q3 2026?
The total availability rate for Sacramento industrial space was 10.1% in Q3 2026, unchanged from Q2 2026 and up 122 basis points from 8.9% in Q3 2025, according to Kidder Mathews research. West Sacramento (15.1%) and Natomas/Northgate (13.9%) had the highest submarket availability rates. (Data source: CoStar)
What are average industrial asking rents in Sacramento in Q3 2026?
The average asking lease rate for Sacramento industrial space was $0.80 per SF per month NNN in Q3 2026, up from $0.79 in Q2 2026 and down 1.2% from $0.81 in Q3 2025, according to Kidder Mathews research. Submarket averages ranged from $0.59 in Auburn/Newcastle to $1.22 in Folsom/El Dorado. By property type, warehouse and distribution averaged $0.74, general industrial $0.78, and flex $1.11. (Data source: CoStar)
How much industrial leasing activity occurred in Sacramento in Q3 2026?
Industrial leasing activity in Sacramento totaled 1,844,791 SF in Q3 2026, below the approximately 2.7M SF recorded in Q2 2026, according to Kidder Mathews research. Year-to-date leasing reached 5,990,522 SF, up 13.6% from 5,276,835 SF in the same period of 2025. Power Inn led all submarkets with 593,979 SF of Q3 leasing activity. (Data source: CoStar)
What was industrial net absorption in Sacramento in Q3 2026?
Direct net absorption in the Sacramento industrial market was positive 347,711 SF in Q3 2026, according to Kidder Mathews research. Net absorption measures the change in occupied space, so a positive figure means tenants occupied more space than they vacated. Year-to-date net absorption reached 570,313 SF, up 98.0% from 287,980 SF a year earlier, with South Sacramento (143,069 SF), Power Inn (134,244 SF), and Davis/Woodland (104,026 SF) posting the largest quarterly gains. Roseville/Rocklin (-164,764 SF) and West Sacramento (-145,314 SF) recorded the largest declines. (Data source: CoStar)
How much industrial space is under construction in Sacramento in Q3 2026?
Approximately 1.6M SF of industrial space was under construction in Sacramento in Q3 2026, a pipeline Kidder Mathews research describes as limited relative to the market’s existing inventory. The largest projects, all owned by Buzz Oates, are Metro Air Pkwy – Costco Warehouse (663,390 SF, Natomas/Northgate, delivering 4Q 2026), 7225 Lone Tree Rd – Titan Logistics Center (558,134 SF, Natomas/Northgate, delivering 2Q 2027), and 10050 Waterman Rd (180,956 SF, Elk Grove/Laguna, delivering 4Q 2026). The report also shows new deliveries of 55K SF, a year-over-year decrease. (Data source: CoStar)
How much industrial space sold in Sacramento in Q3 2026?
Approximately 3.9M SF (3,926,309 SF) of industrial space sold in Sacramento in Q3 2026, up from approximately 1.2M SF in Q2 2026, according to Kidder Mathews research. Dollar volume climbed to roughly $416M. Year-to-date sales volume reached 5,864,514 SF, up 110.8% from 2,781,558 SF in the same period of 2025. (Data source: CoStar)
What was the largest industrial sale in Sacramento in Q3 2026?
The largest industrial sale in Sacramento in Q3 2026 was North Market Business Center in the Natomas/Northgate submarket, a 1,893,681 SF property that sold for $242,500,000, or $128.06 per SF, according to Kidder Mathews research. Blue Rise Ventures/DRA Advisors purchased the property from Link Logistics R.E. The report lists five significant sales for the quarter, including 5440 Stationers Way in McClellan (250,577 SF, $23,750,000), purchased by Scannell Properties from STAG Industrial, Inc. (Data source: CoStar)
What was the largest industrial lease in Sacramento in Q3 2026?
The largest industrial lease in Sacramento in Q3 2026 was a 412,808 SF renewal by Grocery Outlet at 4400 Florin Perkins Rd in the Power Inn submarket, dated September 2026, with landlord Read Investments, according to Kidder Mathews research. Other significant leases included Peak Energy at 7180 Badiee Dr (183,088 SF, Natomas/Northgate, July 2026) and Living Spaces at 2935 Ramco St (123,564 SF, West Sacramento, August 2026). (Data source: CoStar)
What is the unemployment rate in the Sacramento area as of Q3 2026?
The unemployment rate in the Sacramento-Roseville-Folsom MSA was 5.2% in August 2026, up from 4.2% in May 2026 and below the year-ago rate of 5.4%, according to Kidder Mathews research. This compares with 5.1% for California and 4.1% nationally over the same period. (Data source: Bureau of Labor Statistics)
What is the outlook for the Sacramento industrial market as of Q3 2026?
Kidder Mathews research expects Sacramento industrial fundamentals to keep improving gradually as direct vacancy declines and occupied space increases. Elevated availability will likely sustain competition for tenants and limit near-term rent acceleration, while a measured construction pipeline should help the market absorb existing space through year-end. Investment activity could remain uneven as buyers evaluate borrowing costs and asset pricing. (Data source: CoStar)
Last updated: Q3 2026. Data source: CoStar, Kidder Mathews, Bureau of Labor Statistics. Compiled by the Kidder Mathews Research Group.
Q3 2026 Sacramento Industrial Market: Key Data Points
Explore our full Sacramento industrial market review for deeper insights into leasing trends, sale activity, and submarket performance.
- Direct Vacancy and Availability: Direct vacancy was 6.1% in Q3 2026, down from 6.3% in Q2 2026 and up from 5.8% a year earlier, while total availability held at 10.1%, up 122 bps year over year.
- Net Absorption: Direct net absorption was positive 347,711 SF in the quarter and 570,313 SF year to date, up 98.0% from 287,980 SF a year earlier.
- Asking Rents: The average asking rate was $0.80/SF/month NNN, up from $0.79 in Q2 2026 and down 1.2% from $0.81 in Q3 2025.
- Leasing Activity: Leasing totaled 1,844,791 SF in Q3 2026, and year-to-date leasing of 5,990,522 SF is up 13.6% from 5,276,835 SF in 2025.
- Sales Volume: 3,926,309 SF sold in the quarter, with dollar volume of roughly $416M. Year-to-date volume of 5,864,514 SF is up 110.8% from 2,781,558 SF.
- Largest Sale: North Market Business Center (1,893,681 SF, Natomas/Northgate) sold for $242,500,000, or $128.06 per SF.
- Construction Pipeline: Approximately 1.6M SF is under construction, led by Metro Air Pkwy – Costco Warehouse (663,390 SF) and 7225 Lone Tree Rd – Titan Logistics Center (558,134 SF), both in Natomas/Northgate.
Submarket Statistics
| Submarket | Total Inventory (SF) |
Direct Vacancy Rate |
Total Vacancy Rate |
Total Available Rate |
Q3 2026 Direct Net Absorption (SF) |
YTD Direct Net Absorption (SF) |
Q3 2026 Leasing Activity (SF) |
Average Rental Rate (NNN) |
|---|---|---|---|---|---|---|---|---|
| Auburn/Newcastle | 2,794,667 | 5.9% | 6.1% | 8.0% | 13,200 | 26,680 | 17,655 | $0.59 |
| Davis/Woodland | 17,193,379 | 3.7% | 4.9% | 11.4% | 104,026 | 373,725 | 163,850 | $0.62 |
| Downtown | 2,255,328 | 5.3% | 5.3% | 6.0% | 3,460 | -24,546 | 0 | $0.85 |
| East Sacramento | 517,688 | 0.0% | 0.0% | 0.0% | 0 | 1,550 | 0 | $1.20 |
| Elk Grove/Laguna | 7,143,933 | 5.6% | 5.6% | 12.7% | -28,411 | -66,713 | 1,200 | $1.02 |
| Folsom/El Dorado | 5,197,449 | 4.8% | 5.0% | 8.2% | 33,916 | 87,202 | 14,604 | $1.22 |
| Marysville/Yuba City | 7,306,615 | 3.1% | 4.0% | 8.0% | 50,293 | 77,708 | 31,600 | $0.69 |
| Mather | 5,319,938 | 8.7% | 8.8% | 12.6% | -18,323 | -89,534 | 18,138 | $0.82 |
| McClellan | 17,493,244 | 3.7% | 4.5% | 5.6% | -4,365 | 15,501 | 53,506 | $0.71 |
| Natomas/Northgate | 23,854,804 | 8.5% | 10.4% | 13.9% | 100,712 | 402,492 | 300,485 | $0.83 |
| NE Sacramento | 6,222,860 | 4.5% | 4.5% | 5.0% | 53,577 | 101,374 | 92,450 | $0.87 |
| Power Inn | 27,173,980 | 4.5% | 4.6% | 7.8% | 134,244 | 79,537 | 593,979 | $0.84 |
| Richards | 3,997,560 | 5.5% | 6.1% | 5.8% | -8,663 | -6,414 | 14,573 | $0.80 |
| Roseville/Rocklin | 20,316,723 | 5.2% | 8.0% | 10.2% | -164,764 | -218,978 | 136,071 | $1.06 |
| South Sacramento | 3,318,207 | 10.4% | 11.7% | 11.6% | 143,069 | 109,242 | 12,883 | $0.99 |
| Sunrise | 13,494,464 | 5.8% | 5.9% | 7.7% | 81,054 | 148,658 | 121,049 | $0.95 |
| West Sacramento | 24,099,983 | 11.2% | 11.9% | 15.1% | -145,314 | -447,171 | 272,748 | $0.78 |
| Total | 187,700,822 | 6.1% | 7.1% | 10.1% | 347,711 | 570,313 | 1,844,791 | $0.80 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Available Rate | Q3 2026 Direct Net Absorption (SF) | YTD Direct Net Absorption (SF) | Q3 2026 Leasing Activity (SF) | Average Rental Rate (NNN) |
|---|---|---|---|---|---|---|---|---|
| General Industrial | 28,849,785 | 4.7% | 6.4% | 10.4% | 206,718 | 217,821 | 226,944 | $0.78 |
| Warehouse & Distribution | 138,858,265 | 6.3% | 7.1% | 9.7% | 149,365 | 395,844 | 1,483,764 | $0.74 |
| Flex | 19,000,138 | 7.8% | 8.4% | 10.7% | -8,372 | -43,352 | 134,083 | $1.11 |
Significant Sale Transactions Q3 2026
| Property | Submarket | SF | Sale Price | $/SF | Buyer | Seller |
|---|---|---|---|---|---|---|
| North Market Business Ctr | Natomas/Northgate | 1,893,681 | $242,500,000 | $128.06 | Blue Rise Ventures/DRA Advisors | Link Logistics R.E. |
| 3600 & 3685 Massie Ct | West Sacramento | 896,851 | $41,821,500 | $46.63 | Preferred Capital Advisors | Nor-Cal Beverage Co. |
| 5440 Stationers Way | McClellan | 250,577 | $23,750,000 | $94.78 | Scannell Properties | STAG Industrial, Inc. |
| 3600 Industrial Blvd | West Sacramento | 62,739 | $11,750,000 | $187.28 | The Ram Group | Dalfen Industrial |
| 9068 Elkmont | Elk Grove/Laguna | 47,392 | $8,500,000 | $179.36 | Dimitrios Saroukos/Chris & Brandon Deralas | Dutch Bros |
Significant Lease Transactions Q3 2026
| Property | Submarket | SF | Transaction Date | Landlord | Tenant |
|---|---|---|---|---|---|
| 4400 Florin Perkins Rd | Power Inn | 412,808 | September 2026 | Read Investments | Grocery Outlet (Renewal) |
| 7180 Badiee Dr | Natomas/Northgate | 183,088 | July 2026 | BGO | Peak Energy |
| 1400 Churchill Downs Ave | Davis/Woodland | 159,850 | September 2026 | Amir Development Company | Advanced Logistics & Dist. Systems |
| 2935 Ramco St | West Sacramento | 123,564 | August 2026 | Mapletree Real Estate Advisors | Living Spaces |
| 1251 Tinker Rd | Roseville/Rocklin | 90,000 | September 2026 | Golden Eagle Express | One Day Door |
Significant Under Construction
| Property | Submarket | SF | Owner | Delivery |
|---|---|---|---|---|
| Metro Air Pkwy – Costco Warehouse | Natomas/Northgate | 663,390 | Buzz Oates | 4Q 2026 |
| 7225 Lone Tree Rd – Titan Logistics Center | Natomas/Northgate | 558,134 | Buzz Oates | 2Q 2027 |
| 10050 Waterman Rd | Elk Grove/Laguna | 180,956 | Buzz Oates | 4Q 2026 |
Data as of Q3 2026. Source: CoStar, Kidder Mathews, Bureau of Labor Statistics. Prepared by the Kidder Mathews Research Group.
ContactGARY BARAGONA |
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