Sacramento Proposal/Approval/Construction Thread - III

[urban_encounter]

Originally Posted by kmiller5

Sounds like the Miwok tribe bought it. The Pascua Yaqui in Arizona bought land just north of downtown Tucson and after a couple years are turning it into a casino. Any chance for something like that here?

Zero chance. Secondly i can’t think of anyone who would want a casino at the entrance to Capital Mall.

[urban_encounter]

Originally Posted by enigma99a

I can't speak about Oklahoma or some of the other cities, but downtown Sacramento is a complete dump. I don't want to work downtown, let alone live there. Tiffany, Gucci, Louis Vuitton etc are in Roseville. Why would you want to be downtown?

I completely understand your trepidation about coming downtown. I live downtown as a renter and there’s a lot of filth in addition to people suffering substance abuse etc. But CalGeoNerd summarized perfectly why many of us still decide that life in the central city is the best place for many of us at this stage of our lives.

[innov8]

The lack of activity on this forum might reflect the way the economy is
going? Below is a summary of the most current Colliers Sacramento Q2 office market report



I’m a little slow on getting this posted, but Colliers Sacramento Q2 office market report shows several challenges that appear show a trend for the region. As stated in Q2 2024 Sacramento Office Market Report, Sacramento’s office market maintained its trajectory toward setting a record high vacancy rate later this year. Downsizing and consolidation has pushed the market towards record high vacancy rate. There was a negative absorption of -140K sf in the quarter with more planned in the next 12 months with multiple large vacancies slated for the second half of the year (read more under Absorption & Demand).

But on a positive note, Capitol Mall’s properties are recording significant occupancy gains through the first half of the year. 400 Capitol Mall went on the market for sale this quarter and will test buyer demand for stabilized Class A high rises.

Colliers forecast that the State of California’s return to office this summer, two days a week will increase foot traffic in the urban core. The Sacramento office market has been downsizing for the last four years. With the lack of demand, local office inventory will likely diminish in years ahead. There are approximately 1 million square feet of office properties being evaluated for conversions to alternative uses, including medical office, apartments and hotels.

[SacTownAndy]

Per the Business Journal today, the proposed 28-story highrise residential project at 201 N St is now on hold indefinitely. They haven't heard from the developer since 2022. Another one bites the dust...

[urban_encounter]

I believe it is still listed on their website, but this is just the kind of news whether it's local developers or national developers that Sacramento has come to expect. I suspect, Fresno will see high-rise/condo apartment living before Sacramento.

[Bubb90]

Originally Posted by urban_encounter

I believe it is still listed on their website, but this is just the kind of news whether it's local developers or national developers that Sacramento has come to expect. I suspect, Fresno will see high-rise/condo apartment living before Sacramento.

It's still listed as upcoming on their page https://southernland.com/property/sacramento/

[innov8]

Originally Posted by Bubb90

It's still listed as upcoming on their page https://southernland.com/property/sacramento/

The Towers on Capitol Mall had an active website for nearly six years after
the project was canceled by CalPERS. The marketing departments keeping the
dream alive... I'll be thrilled if an eight story mixed use building eventually gets
built there.

[urban_encounter]

re: the 24-story state building with a ground floor scaffolding to protect from falling windows. I believe it was previously the board of equalization (BOE)


I'm just curious what their plans are. There have been a few buildings to receive renovations in the downtown (for the State). My guess (and this is only a guess) is they will need to go all in and fix the leeks and windows. In other words, a very expensive makeover to make the building friendly to government or commercial traffic.

I also asked about the State Fountain between the Library and Courts. Sometimes there's just enough construction crap sitting in it to make me think maybe. But that's really extremely unlikely.

[wburg]

Originally Posted by urban_encounter

re: the 24-story state building with a ground floor scaffolding to protect from falling windows. I believe it was previously the board of equalization (BOE)


I'm just curious what their plans are. There have been a few buildings to receive renovations in the downtown (for the State). My guess (and this is only a guess) is they will need to go all in and fix the leeks and windows. In other words, a very expensive makeover to make the building friendly to government or commercial traffic.

I also asked about the State Fountain between the Library and Courts. Sometimes there's just enough construction crap sitting in it to make me think maybe. But that's really extremely unlikely.

I don't think there are any particular plans for the BOE building, but I think it also had "sick building syndrome" problems in addition to the windows that would pop out at random, so would require extensive overhaul of HVAC systems as well as cladding--if they're going to have to give it that extensive of a makeover, it might be a candidate for residential conversion; because it is a 1980s large-floorplate office building it might not be a suitable candidate for adaptive reuse like the buildings on Capitol (although taking down a building that size is expensive), but theoretically that whole block could become housing instead of 1/4 vacant office tower and 3/4 vacant parking structure.

The fountain between Library & Courts and the Unruh Building is currently being restored, after a lengthy lobbying campaign to restore it instead of DGS' original plan of demolishing and paving it over.

[urban_encounter]

Originally Posted by wburg

I don't think there are any particular plans for the BOE building, but I think it also had "sick building syndrome" problems in addition to the windows that would pop out at random, so would require extensive overhaul of HVAC systems as well as cladding--if they're going to have to give it that extensive of a makeover, it might be a candidate for residential conversion; because it is a 1980s large-floorplate office building it might not be a suitable candidate for adaptive reuse like the buildings on Capitol (although taking down a building that size is expensive), but theoretically that whole block could become housing instead of 1/4 vacant office tower and 3/4 vacant parking structure.

The fountain between Library & Courts and the Unruh Building is currently being restored, after a lengthy lobbying campaign to restore it instead of DGS' original plan of demolishing and paving it over.

Hey wburg thank you for the update. California is slow to commit to a plan of action. I would the next Mayor with the City Manager would start lobbying the State but I won’t hold my breath.

I’m thrilled they’re rehabilitating the the fountain. I figured they (the State) would bulldoze it. They don’t have a good track record when it comes to maintenance of State water features and art.

[innov8]

Originally Posted by urban_encounter

re: the 24-story state building with a ground floor scaffolding to protect from falling windows. I believe it was previously the board of equalization (BOE)


I'm just curious what their plans are. There have been a few buildings to receive renovations in the downtown (for the State). My guess (and this is only a guess) is they will need to go all in and fix the leeks and windows. In other words, a very expensive makeover to make the building friendly to government or commercial traffic.

I also asked about the State Fountain between the Library and Courts. Sometimes there's just enough construction crap sitting in it to make me think maybe. But that's really extremely unlikely.

Believe it or not, there are or were eleven other state buildings in
Sacramento in worst shape than the BOE which is considered fair. This
webpage has not been updated since 2016, but it gives you a good idea
of all the structures in California and Sacramento that need work. Not much
has been said since 2022 about a BOE conversion.

https://lao.ca.gov/Publications/Report/3516

https://www.cbsnews.com/sacramento/n...-into-housing/

[wburg]

Originally Posted by innov8

Believe it or not, there are or were eleven other state buildings in
Sacramento in worst shape than the BOE which is considered fair. This
webpage has not been updated since 2016, but it gives you a good idea
of all the structures in California and Sacramento that need work. Not much
has been said since 2022 about a BOE conversion.

https://lao.ca.gov/Publications/Report/3516

https://www.cbsnews.com/sacramento/n...-into-housing/

Interesting list, thank you for sharing! But it's worth noting that Resources, Bateson and Unruh are in mid-rehab, while Personnel, EDD HQ and EDD Annex are planned for residential conversion. I think Bonderson and Energy Building will likely get the same rehab treatment as Bateson (they were all built around the same time as part of the Sim van der Ryn State Capitol Plan projects), while Blue Anchor would be an excellent candidate for residential conversion--it's a historic office building with relatively small & narrow floor plate (new office buildings with big floorplates are harder to convert) and that takes care of a big slice of the top of this list. So BOE isn't quite to the top of the list, but it's a lot closer to the top than it was in 2016. Progress!

[enigma99a]

Apparently downtown Macys is due to close by the end of the year, and word is that the Kings own the land and are planning a hotel?

[wburg]

Originally Posted by enigma99a

Apparently downtown Macys is due to close by the end of the year, and word is that the Kings own the land and are planning a hotel?

There's lots of rumor mill, but Macy's owned the land and presumably selling it to the Kings would be very big news. But so far it's just rumor-mongering, with no confirmation. I think it would be very bad indeed to lose the last big downtown department store, especially happening a week or two after a high-profile report that calls out the importance of downtown amenities as a way to attract and retain downtown residents. Being without a single downtown department store would be a black eye for the city; sure, we need more hotel space, but we also need places to buy clothes, furniture, housewares, jewelry, and so on.

[CAGeoNerd]

Sacramento - where we don't have many plans, but we have "concepts of plans"

[wburg]

Originally Posted by CAGeoNerd

Sacramento - where we don't have many plans, but we have "concepts of plans"

We make plenty of plans, some pretty good and some literally award-winning, but then the local developers need an exception to the plan, just this one time, and then again, and again, and again, and eventually you get North Natomas. And when local leaders call for builders following the plan, developer lobbyists freak out and say it's time to elect leaders more amenable to letting the developers use their "concepts of plans."

[wburg]

In skyscraper related news, from the Business Journal: https://www.bizjournals.com/sacramen...n-auction.html

Downtown high-rise Renaissance Tower headed to Oct. 21 auction

Months after going up for sale unpriced, Downtown Sacramento's Renaissance Tower skyscraper will instead go to an online auction.

LoopNet's Ten-X arm will host the auction for the 28-story building at 801 K St., which will be up for bids from Oct. 21 through 23.
...
Aspects of the listing suggest a challenging situation for the building, which is about 338,400 square feet and built in 1989. According to the auction listing, the building is currently 27% leased, well below most other "trophy" office properties in Sacramento's urban core. Renaissance Tower also has a seven-story attached parking garage.

Also, the starting bid for the building would be $8.5 million. That's nearly a tenth of the building's last sale price, $80 million in 2016 to Office Properties Income Trust (Nasdaq: OPI).

Maybe someone more familiar with contemporary office valuations can provide some insight: is this implying that Renaissance Tower has lost nearly 90% of its property value since 2016?

[Schmoe]

Hard to say without a lot more details, but my scratch math indicates it would take $60mm just to get it up to market standards and offer strong T.I. allowances. So, it seems any bid under $20mm would afford the buyer a nice value-add opportunity.

[innov8]

The decline of downtown Sacramento and the office market now is more clear
than ever. As reported by KCRA 3, Sacramento's tallest tower
has sold for a steep decline, a 67% drop in value from what it was most
recently sold for. The tower was originally constructed for $120 million in 1992
and sold in 2000 for $130 million. The building was later resold again to to
Hines’ Core Fund in 2007 for $237,250,000 million. The 501,308-square-foot
was most recently sold to an all-cash buyer for $117 million.

[wburg]

Originally Posted by innov8

The decline of downtown Sacramento and the office market now is more clear
than ever. As reported by KCRA 3, Sacramento's tallest tower
has sold for a steep decline, a 67% drop in value from what it was most
recently sold for. The tower was originally constructed for $120 million in 1992
and sold in 2000 for $130 million. The building was later resold again to to
Hines’ Core Fund in 2007 for $237,250,000 million. The 501,308-square-foot
was most recently sold to an all-cash buyer for $117 million.

Still, that's a fairly mild decline compared to the starting bid for the Renaissance Tower, which is closer to the 90% drop in office prices for commercial buildings in places like San Francisco. While this building isn't that good of a candidate for residential conversion, like other 1980s-2010s large-floorplate office towers, it underscores the need for residential conversion, or where necessary, residential replacement of the massive surplus of office buildings in downtown Sacramento (as with other cities.) Depending on offices and commuters has been a losing strategy for downtown Sacramento for half a century, what say we stop trying the same thing and hoping for a different result?