Shopoff Realty Places Major Urban Infill Development Site in Sacramento up for Sale

Shopoff Realty, Sacramento, Northern California, Colliers 2100 Q Street

By Jon Peterson

As the commercial real estate market continues to evolve, development opportunities across Northern California are faced with new realities or a changing landscape. Irvine, Calif.-based Shopoff Realty Investments, a value-add investment and development real estate firm, is now looking to exit an opportunity in Northern California. The company placed on the market for sale an urban infill Sacramento development opportunity located at 2100 Q Street, according to sources familiar with the property. There was no pricing guidance available on the property at this time, but the site could deliver a massive housing or mixed-use development with new ownership.

The seller has selected Colliers to be the listing agent and lead the marketing efforts for the property. Those working on the sale include Brad Idleman and Bob Gilley, both executive vice presidents with the brokerage firm.

The site could be redeveloped in two different ways in the future. One option would be the construction of 690 units in a multifamily housing community. The other option could deliver a mixed-use development that would include some housing and commercial space for a total of 820,000 square feet. The site is part of the Central City Specific Plan for Sacramento, which aims to remove barriers inhibiting housing development and focus on transit-oriented projects throughout the region. 2100 Q Street fits this well into this plan, since it is located less than a block away from a light rail stop.

In the past, the development had been the home to Sacramento Bee newspaper operation, and it housed the newspaper’s printing press, distribution operations along with journalists and corporate staff. The existing property has 16,000 amps of cost-efficient power, which could also bring some industrial interest in the project and position it to compete for industrial uses such, as data centers and cold storage.

The site totals 6.28 acres, and according to some estimates, it should attract very strong interest from a variety of capital sources including major institutions and development firms.

The potential for the development site to be converted to apartments is there, and more renters have become interested in the Sacramento region since the outbreak of COVID-19. Some market analysts believe that this is not a trend that is likely to change in the future.

The apartment market in the vicinity of 2100 Q Street is referred to as the Midtown Sacramento sub-market. This area and Downtown Sacramento have over 17,000 existing units with an additional 2,500 units that are under construction. The current occupancy in this area is 96.1 percent. Notwithstanding a minor demand shock during COVID-19, the vacancy rate has remained below five percent for the last six years, even as the market has continued to experience a near-record number of deliveries.

The rental growth rate for Sacramento has been strong, according to Colliers. At the end of 2021, it had the fourth-highest multifamily rent growth in the western United States and a 16.4 percent year-to-year increase.

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