What's attracting office buyers to downtown Sacramento these days isn't necessarily proximity to Golden 1 Center or cutting-edge design, according to one broker. It's an old but still popular feature: on-site parking.
Senior vice president Tom Bacon of Kidder Mathews said owner-users are especially attracted when small offices come with enough parking for their own firm and other tenants.
"Makes leasing up vacancy and eventual sale easier," Bacon said in an email. "In addition, as an owner-occupant, having parking on site is just logistically better." Based on a cap rate of 6 percent and per-month leasing of $150 a stall, 20 spaces equates to about $600,000, he said.
In the last two weeks, Bacon worked on behalf of a law firm that bought a two-story, 11,000-square-foot building at 1234 H St. for $1.99 million. The building had good parking - just like three other midtown/downtown buildings that also traded hands in recent months: 1001 G St., 1030 G St. and 2831 G St.
The unnamed law firm will occupy the second floor of 1234 H St. and lease out the first-floor space. In addition to parking, Bacon said, buyers in such deals are getting long-term stability and protection on occupancy costs. With interest rates low and downtown office rents rising, he said, it's also easier to appraise such buildings.
"It's just another substantiation of the market's viability," he said. A few years ago, firms were flocking to midtown but not downtown as much. With midtown vacancy now at 3 percent and new development activity downtown, that submarket's fortunes have also improved dramatically, according to Bacon.
Tony Whittaker of CBRE Sacramento represented the seller, Green & Azevedo Investments, on the purchase of 1234 H St.
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