Last week’s sale of an empty office building in downtown Sacramento, which is to be turned into apartments, is a step in right direction for the city, say two commercial real estate experts.
A need for housing, particularly market-rate apartments and condominiums, is something developers have begun exploring since word of a new arena firmed up, said Dave Herrera, a vice president with Colliers International who specializes in downtown and midtown properties.
“I’ve talked to out-of-state developers who are looking at it,” Herrera said. If the building known as the Hall of Justice, at 813 Sixth Street, is converted into apartments in the next few years, it’s not the last one that’ll do so, he said.
He noted discussions about redeveloping and upgrading Downtown Plaza to include a lifestyle shopping center would naturally spur residential development downtown.
Another dealer in downtown properties, Bruce Slaton, said apartments are good, but condominiums would be better. Too much of what’s been built recently in downtown and midtown, he said, is geared toward affordable housing or is under the auspices of an agency like the Capitol Area Development Authority. But most of the calls he gets are for condos in downtown Sacramento, he added.
“After word of the arena got out, I got calls from institutional investors asking about unfinished condo projects,” he said. “You look at a lot of the projects that got mothballed when the market died, they really make sense today.”
Slaton said many downtown property owners are holding back because they’re waiting for appreciation from the nearby new arena to give their values a boost. Once they think they can make good money, they’ll sell to investors who have an eye on developing new projects, he said.
Source: Sacramento Business Journal