Business Journal: The Future Of Office Space In Sacramento In A Post-Coronavirus World

Desy Papper

Nearly a year into the coronavirus pandemic, some jobs have moved to almost fully remote, leaving the future of office spaces around the state in limbo.  Sacramento’s market for office space has declined for the first year in nearly a decade. Factors like the pace of the COVID-19 vaccine rollout, […]

Nearly a year into the coronavirus pandemic, some jobs have moved to almost fully remote, leaving the future of office spaces around the state in limbo. 

Sacramento’s market for office space has declined for the first year in nearly a decade. Factors like the pace of the COVID-19 vaccine rollout, whether work-from-home policies will continue after the pandemic subsides and what the state of California chooses to do with its building leases will impact the outlook for the market. 

Sacramento Business Journal Editor-in-Chief Adam Steinhauer joined CapRadio’s Mike Hagerty to discuss the uncertain future of the office world.

This interview has been edited for clarity and length

Interview Highlights

On the general predictions about the future of office spaces

A lot of factors are kind of clouding the outlook. One of those is, of course, the pace of the vaccine rollout, whether businesses choose to stick with some of the work-from-home policies they’ve adopted or whether they decided those weren’t as productive as they thought and bring people back to the office. And then there is the biggest office tenant in downtown Sacramento: the state of California. And there isn’t a lot of visibility currently on what they’re likely to do with their office space and reaction to all this.  

On how long it’s been since we’ve seen this kind of imbalance between filled space and unfilled space 

It’s been almost a decade going back to coming out of the last recession that we’ve had negative of what they refer to as absorption in the office market in Sacramento, of basically a decline in the amount of space leased.  

On what offices might look like in the future

This is an area subject to a great deal of speculation. But some of the brokers we spoke to said that it’s possible that private offices might come back into style to basically minimize face-to-face meetings that are unnecessary. 

It’s possible you’ll see fewer offices with conference rooms. We’ve all gotten used to doing our meetings like you and I are doing now, over Zoom, or over Microsoft teams — maybe even when we’re back in the office we will continue doing that. 

It’s also possible that maybe some businesses will choose to keep some of these work-from-home policies. Maybe people will come into the office only some days a week and not others. And with that, maybe not as much space should be necessary. Maybe you would hypothetically share a desk with somebody who wasn’t in on the days that you are. But it’s also possible that people like that. Everybody likes to have their own desk. So maybe that won’t happen. A lot’s up in the air right now. 

On the state of California’s office leases throughout Sacramento

The state has a footprint of about 9 million square feet in Sacramento County alone. The way the state structures its leases are such that only about half of its leases are at a place where the state could leave with only a year’s notice. So if there isn’t any change to the state’s leasing policy, it’s not going to be apparent immediately. And from what we have heard from state officials, there is no policy currently that would require states to shrink their office space. So that seems to be being decided by each agency and department for its own needs, at least at this point. 


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