Sacramento’s industrial market is sending mixed signals. Leasing momentum picked up in Q2, but vacancy keeps climbing, rents are barely moving, and net absorption over the past 12 months is negative.

Here’s what the CoStar data (as of September 5, 2026) actually says.

The Headline Numbers

Total industrial inventory sits at 195.9 million SF across the Sacramento metro.

Vacancy: 7.1%. That’s up 60 basis points year-over-year, though still below the national average of 7.4%. CoStar forecasts it’ll tick up slightly to 7.2% by year-end.

Availability rate: 9.5%. The gap between vacancy and availability tells you there’s shadow space on the market (subleases, spaces being marketed before lease expiration) that hasn’t technically gone vacant yet.

12-month net absorption: negative 291,000 SF. More space came back to the market than tenants absorbed. Not catastrophic, but it’s the wrong direction.

Market asking rent: $0.99/SF. Rent growth has slowed to 0.7% year-over-year, the weakest pace since 2012. The long-term average is 3.8%. That gap tells the whole story of where pricing power sits right now (spoiler: with tenants).

Q2 Brought Some Life

The bright spot: Q2 2026 leasing volume exceeded 2 million SF. That’s the first time the market hit that mark in 2 years, and net absorption was positive for the second straight quarter.

Some notable deals that drove the number:

• Silgan Holdings: 481,000 SF in South Sacramento
• Pacific Coast Producers: 399,500 SF in Davis/Woodland
• Mark III Construction: 320,000 SF at McClellan
• Ryder System: 275,800 SF in Sunrise (10-year term, $9.60/SF NNN, 36-ft clear)
• Redwood Beverage Group: 236,700 SF in West Sacramento
• Skyline Cabinetry: 109,800 SF in West Sacramento

That’s real activity. The Ryder deal is particularly telling: a national logistics operator committing to a decade in Sacramento at competitive terms. That’s a vote of confidence.

Rents by Product Type

Not all industrial is created equal. Here’s how rents break down:

• Logistics: $0.95/SF (6.9% vacancy)
• Specialized Industrial: $1.01/SF (7.8% vacancy)
• Flex: $1.26/SF (8.0% vacancy)

Small-bay product (under 50,000 SF) remains the tightest segment. Vacancy for small-bay dropped below 4.5%, the lowest since 2024. Rents in that range run $9 to $12/SF NNN. If you own small-bay in Sacramento, you’re in the best seat in the market.

Large logistics space (250,000+ SF) is a different story. Vacancy sits at 11%, roughly 300 basis points above the 10-year average. That’s where the oversupply concern lives.

Concessions Are Real

Tenants have more negotiating power than they’ve had in years. Free rent is common across deal sizes. Tenant improvement allowances are running $3 to $5/SF. If you’re a tenant shopping for space right now, you’ve got options and you’ve got the upper hand.

For landlords, this means competing harder on terms. The days of posting a rate and waiting for the phone to ring are over (for now).

Investment Sales

Capital is still flowing, but more selectively. Past 12-month sales volume: $1.1 billion across 332 comps. Average cap rate: 6.6%. Average price per SF: $139.

Year-to-date: 214 deals totaling $780 million, with the average cap rate ticking up to 7.1%.

The biggest trade: Blackstone sold a 13-building, 1.3 million SF logistics portfolio in West Sacramento to Dalfen Industrial for $155 million. That’s the largest single industrial transaction in Sacramento since 2018. It signals institutional capital still sees long-term value here, even as operating fundamentals soften.

Link Logistics also moved a 320,000 SF distribution center in Woodland for $28.5 million (roughly $90/SF), fully occupied with a 4-year weighted average lease term.

What This Means

Sacramento’s industrial market is recalibrating. The pandemic-era frenzy of zero vacancy and double-digit rent growth is behind us. What’s settling in is a market that favors well-located, right-sized product and punishes speculative large-bay space.

If you’re an owner: watch your competitive set. Concessions are the new reality. Pricing your space right from day one matters more than it has in years.

If you’re a buyer: cap rates have moved. A 7.1% average means better entry points than 18 months ago, but underwrite conservatively on rent growth. The CoStar forecast calls for 1.2% growth to close out 2026.

If you’re a tenant: this is your window. Negotiate hard. The data supports it.

Data sourced from CoStar Sacramento Industrial Market Report, September 5, 2026.