TURTON - LoopNet

TURTON

URBAN SACRAMENTO’S MOST EXCITING COMMERCIAL DEVELOPMENT OPPORTUNITY

WPTHE

S AC R A M E N T O ’ S

N E X T D E V E LO P M E N T

O P P O R T U N I T Y

0 1

W P @ 1 9 J - K

The Property is one of, if not, the most valuable land parcels available in the City of Sacramento.

Current ownership is requesting a unique transaction process whereby a buyer/developer would sign

a long-term land lease with a guaranteed option to purchase at project completion if so desired. The

land lease rent would commence at $7.50 per square foot (“SF”) annually. Upon full stabilization of the

completed project and subsequent conversion to a permanent loan, Buyer would exercise their Option

to Purchase at a predetermined price. Sellers would have the option of receiving cash or converting the

value to an equity position in the development project. The specific terms the Purchase Option to be

discussed and dependent on the agreed upon development and developer.

The 30,000 SF Property, positioned on 19th between J and K Streets, is without question one of the best

locations in the City. Benefitted by two of the highest traffic count corners in the urban core and within

easy walking distance of dozens of Sacramento’s finest eateries, coffee shops and watering holes, the

Property provides an ideal opportunity to develop the most desirable multi-family, mixed use residential

project in Midtown. That said, the development opportunity is certainly not restricted to multi-family de-

velopment. The C-2 General Commercial zoning allows a wide range of permitted uses including Office,

Retail, Hotel/Motel as well as more specific uses including College Extension, Athletic Club, Museum,

Passenger Terminal and Theater to name a few. The spectrum for allowed uses increases when includ-

ing allowable uses subject to Conditional Use Permits

E X E C U T I V E S U M M A RYTurton Commercial Real Estate is pleased to present the opportunity

to purchase the WP Building - a ground lease/joint venture sale

located in the heart of midtown at 19J-19K.

0 2 0 3

S E C T I O N O N E : E X E C U T I V E S U M M A R Y

BUILDING INFO

The WP enjoys one of, if

not, the best locations in

Midtown, Sacramento.

Address 1025 19th Street, Sacramento CA 95816

Parcel Size 26,000-30,000 SF

Building SF 13,000 SF

Stories One Level with Basement Level

Zoning C-2 - UN General Commercial/Urban Neighborhood

75 90KSF FARUNITS

UP TO UP TO

WPTHE

SACR AMEN T OSacramento is the Capitol of California, the sixth largest economy in the world. While perhaps not considered as sexy

as many of the tourism based cities in California such as San Francisco, Los Angeles and San Diego, being the hub

of California’s governmental structure provides an incredible amount of economic stability throughout the region.

In addition, Sacramento is being increasingly recognized as an outdoor enthusiast’s dream city with its remarkably

central location to Lake Tahoe, the Sierra’s, Yosemite and the Coast.

In a recent study completed by WalletHub for National Nutrition Month, Sacramento was ranked the 5th healthiest

city in the United States among 100 large cities (ranking higher than the likes of Denver, Colorado Springs, San

Francisco, Portland, Austin, San Antonio and Seattle). Forbes magazine ranked Sacramento as the 10th healthiest

city in the United States versus all cities. A big part of this recognition stems from the cities’ proximity to the Amer-

ican River. Hiking trails and white water rafting abound along the American River as well as one of Sacramento’s

crown jewels... the 32 mile American River Bike Trail which runs entirely along the river from Beal’s State Park to

Discovery Park where it conjoins with the Sacramento River to Old Sacramento on the riverfront (only 13 blocks from

the Subject Property).

15.3 MILLIONDAYTIME EMPLOYEES DOWNTOWN BARSANNUAL REGIONAL VISITORS RESTAURANTSTOTAL DOWNTOWN RESIDENTS

SACRAMENTO REGION ANNUAL SALARY BREAKDOWN:

Over $100,000 - 17%$75,000 - $100,000 - 11%

$60,000 - $75,000 - 10%$40,000 - $60,000 - 18%

$30,000 - $40,000 - 12%Under $30,000 - 32%

#1 Happiest workers in midsized cities

#1 Most valuable minor league baseball team

#2 Top 10 most fun, affordable U.S. cities

#4 U.S metro clean tech index

#4 Best cities for nerds

#5 Hot startup cities

#10 Best cities for women in the workforce

#10 Best cities for coffee snobs

#10 Lease Stressed-out cities

#14 America’s coolest cities

#16 Best cities for millennials

SACRAMENTO’S CITY RANKINGS

0 4 0 5

S E C T I O N T W O : S A C R A M E N T O

LARGEST EMPLOYMENT INDUSTRIES WITHIN 1 MILE RADIUS OF THE PROPERTY:

ANNUAL CONSUMER SPEND-ING WITHIN A ONE MILE RADIUS OF THE PROPERTY:

Entertainment

Eateries/alc.

Transport

Health & ed.

Household

20 40 60 80*Numbers in millions0

*Based on data from 2017

NUMBER OF EMPLOYEESWITHIN VARYING RADIUS OF THE PROPERTY:

1 MILE 2 3

100,731

144,513

193,978

48% Public Admin. & Sales17% Science & Tech.

4% Information

5% Healthcare & Social

7% Hospitality & Food

19% Other

While recognized by many

as the farm-to-fork capitol

of America, Sacramento also

features great breweries,

coffee roasters, and a

state-of-the-art downtown

entertainment arena.

2011 20172012 2013 2014 2015 2016

$2,000

$1,500

$1,000

$500

AVERAGE MONTHLY RENTAL RATE IN SACRAMENTO:

WPTHE

LIFESTYLE

THISCIT Y

ROCKSSacramento boasts absolutely no shortage of top-notch

restaurants, sharp local IPAs, hole-in-the-wall hidden gems, skilled baristas, electronic music street festivals, light-up

party bikes, outstanding produce, and warm people.


0 6

WPTHE

Located only 85 miles east of San Francisco, Sacramento enjoys easy, unfettered access to all of the entertainment

amenities provided by the robust Bay Area as well as the entire Northern California region, for about 60% of the

cost.

Blessed with a consistent climate featuring over 300 days of sun on average throughout the year, the region is lo-

cated at the Northern portion the Central Valley which produces more agriculture than any other valley in the United

States, If you are eating a tomato in the United States there is a 9 in 10 chance it came from the Central Valley. Let-

tuce, almonds, rice and mandarin oranges are close behind. This unique combination of soil, water and temperature

in coordination with Sacramento’s solid, highly reliable economic base to create the perfect combination of variables

to truly make Sacramento the “farm-to-fork” capitol of the world. No one on Earth, as a whole, eats fresher food than

Sacramentans.* And if you want to select the perfect wine to compliment your meal you are a mere 60 minutes from

arguably the finest wine region in the world. On any given day it is actually faster (not closer) to get to downtown

Napa from downtown Sacramento than downtown San Francisco.


0 9

2 HOURSTO SOUTH LAKE TAHOE

2 HOURSTO DILLON BEACH

3 NEARBYMAJOR WINE REGIONS

CL OSE T O E VERY T HING

Mountains to the east,

ocean to the west; it’s no

wonder how Sacramento

earned its reputation as an

outdoorsman’s paradise.

* Statement may be subject to slight hyperbole.

WPTHE

(A/O)

Ten minutes from downtown Sacramento is the University of California at Davis, acknowledged as one of, if not,

the finest agricultural institutions in America and home to the Mondavi Center, a $10M performance art center

donated by the Mondavi Family who also maintain a close relationship with Davis’ renown vinology department.

In addition to the State Government, Sacramento features a number of larger locally based employers including

Vision Service Plan, Blue Diamond Almond Growers (located on 16th Street), Raley’s, Sutter Health, Dignity Health,

Kaiser Permanente, UC Davis Medical Center, McClatchy as well as California Public Employees Retirement System

and California State Teachers Employee Retirement System: two of the largest pension funds in the world. Region-

al employers with a large presence in Sacramento include AT&T, Wells Fargo, Intel, Apple, AAA, and Tesla.

Employment growth in Sacramento has largely outpaced the national average since 2012. Professional and

business services, as well as leisure and hospitality, have been among the strongest growth sectors in this cycle,

but education and health services, sector has been the largest contributor to job growth since the bottom of the

economic downturn. Total employment in this sector is nearly 25% above its prerecession peak. Local hospitals

have noted that, as of May 2017, thousands of medical positions remain unfilled due to the lack of skilled talent in

the metro. Within the professional and business services sector, administrative and support jobs have benefitted,

because the metro’s low business costs attract firms with back-office operations. Continued growth is expected

in the state and local government sectors. Sacramento has the highest share of public sector employment in the

country (approximately 25%) ahead of even that of Washington D.C.

Sacramento’s relative affordability versus amenities remains one of its biggest draws. Population growth is

expected to average about 1% (20,000 annually for the region) over the next five years and is expected to outpace

the national average. Household growth continues to far outpace the rate of single-family and apartment deliver-

ies. In recent years, Bay Area residents have flocked to Sacramento to escape exorbitant housing costs.


15MINUTES TO UC DAVIS

19MAJOR STATE HEADQUARTERS

6LARGE MEDICAL CENTERS

C A L IFORNIA’S CIVIC EPICEN T ER

1 0 1 1

WPTHE

S E C T I O N T H R E E : T H E S A C R A M E N T O R E N A I S S A N C E

URBAN RENAISSANCEThe word “renaissance” is often overused and inappropriate to describe economic improvement in the urban core

of cities throughout the United States. That is not the case in Sacramento. But nowhere is the word “renaissance”it

more applicable and demonstrable than the City of Sacramento.

In 2012 the economic outlook for Downtown Sacramento and the region as a whole looked somewhat bleak. The

urban core was anchored by a blighted and inactivated retail mall located dead center in its retail grid. The Mall, for-

merly owned by Westfield, had undergone several facelifts none of which achieved the economic results envisioned.

The Sacramento Kings, then owned by the Maloof Family, were threatening to leave for Seattle and the 30 year old

Sleep Train Arena located in a nearby suburb was tired and functionally obsolete.

All of this changed in 2013 when Mayor Kevin Johnson used his considerable influence with the NBA and Northern

California to complete the single most meaningful and transformative economic transaction in Sacramento since

it was named the Capitol. He brought in a Bay Area ownership team to purchase the Kings - then worked with City

Management to construct a masterful plan to build a new state-of-the-art 19,000 seat arena in place of the blight-

ed center at the heart of the downtown grid.

The impact to Sacramento’s urban core of this miraculous achievement cannot be overstated and it has truly formed

the foundation for Sacramento’s urban renaissance. Since the formal approval by City Council of the City’s contribu-

tion to construct the Arena (and retain the Sacramento Kings) the floodgates have figuratively opened to the urban

migration of retailers, businesses and residents. Vacancy rates in commercial properties have dropped steadily and

rapidly in every urban district. Property values escalated exponentially. Blighted buildings on the J, K and L Street

corridors were (or are in the process of being) activated. Over 2,000 new residential units were constructed over

the next three years.

600,000+NEW HOUSING UNITS PLANNED SF OF NEW INFILL DEVELOPMENT

1 2 1 3

Pedestrian counts have

already quadrupled since

the completion of the

Golden 1 Center - and it’s

still in its infancy.

WPTHE

The location for urban infill development in Sacramento doesn’t get better than this. The site offers an incredible amount of versatility in accommodating a

variety of proposed uses: Multifamily, Creative Office, Retail or a location for a hip new Hotel are all viable at this 19/J/K site. This development is prominently

situated on a hard corner in Sacramento’s most desirable and perfectly curated urban setting. Think about what tenants and residents and visitors want. They

want an exciting and walkable setting with coffee, beer, food and art. They want to live where they work where they socialize. They want to be pleasantly surprised

with events to connect with others while they are visiting. To appreciate artistic expression or chance encounters with friends when coming and going from their

meetings or activities.

That place exists at 19/J/K in the heart of Midtown. Midtown Sacramento is the perfect fusion of successful locally owned business and organic youth infused

goods and services; a healthy dose of carefully selected national and regional retailers and an eclectic mix of high-end demographic occupations are embedded

in a landscape of unique older buildings and mature trees. Business owners, residents and investors have flocked to the center of Sacramento’s art, music, and

cultural scene to due to its vibrancy. Many people consider Midtown to be the most centralized area in the city of Sacramento, with easy access to Downtown, Old

Sacramento, West Sacramento and East Sacramento.

Within Midtown, the Lavender Heights neighborhood has emerged as one of the submarket’s hottest micro-markets. The hub of this exciting district is the MARRS

building located at 20th/J/K. The neighborhood features Sacramento’s most successful restaurants and nightlife venues and has an eclectic mix of local restau-

rants, art galleries, coffee houses and boutiques. The district has high foot traffic both day and night, and is a hot spot for those who love to eat and drink, and

enjoy many of Midtown’s most popular establishments. While it is an excellent starting location for the popular Second Saturday festivities, the District is home

to many additional noteworthy events such as the Midtown Farmers’ Market, THIS Sacramento block parties, PARK(ing) Day, and more.

Large infill housing and mixed-use development projects are scattered throughout the grid, indicating regional growth and an increased emphasis on inner-city

living. Midtown development is abundant and headlined by a planned mixed-use development on 21st and L19th & J Street. Nearby prominent tenants include

Starbucks, Peet’s, Noah’s Bagels, Pete’s Restaurant & Brewhouse, Bev Mo, Tank House, The Old Spaghetti Factory, Faces, Badlands, Subway, Golden Road Brew-

ing, Art Galleries and many more.

Coffee: There isn’t a better location to grab coffee. Want to meet with a client outside of the office or connect with a friend in town for an hour? Options for any

coffee drinker are fulfilled with local varieties including local favorites The Mill (1 block), Pachamama (1Block), Temple (2.5 blocks) and Old Soul (1 block) to more

corporate options including both Starbucks (.25 blocks) and Peet’s Coffee (.25 Blocks).

Art & Entertainment: This is ground zero. When people want to get together for cocktails or to start their evening, 20th & K is known as the starting point.

Several art galleries are walking distance from one another with public murals connecting the submarket from place to place. Midtown Farmer’s markets on

Saturday mornings and activated events including THIS is Midtown throughout the year have created a strong cultural identity for Midtown and Sacramento’s

urban revitalization.

M AIN & M AIN

S E C T I O N F O U R : P R O P E R T Y L O C A T I O N

1 4

the WP at 19J - 19K is within

easy walking distance of

over 100 restaurants, 20

coffee shops and 40 bars.

Many of the finest are

within 3 blocks.

WPTHE


1 8

PROPER T Y LOCAT IONThe Property is located within easy walking distance of virtually

every significant landmark in Sacramento’s urban core:

0BLOCKS FROM THE

J STREET CORRIDOR

1BLOCK FROM 2ND SATURDAY /

“THIS” CONCERT SERIES

4BLOCKS FROM

THE STATE CAPITOL

10BLOCKS FROMINTERSTATE 80

0BLOCK FROM THE 19J

MULTIFAMILY DEVELOPMENT

1BLOCK FROM LAVENDER

HEIGHTS DISTRICT

5BLOCKS FROM THE CENTRAL

BUSINESS DISTRICT

8BLOCKS FROM

THE K STREET CORRIDOR

1BLOCK FROM THE MARRS

BUILDING

1BLOCK FROM THE HANDLE DISTRICT

7BLOCKS FROM

THE SUTTER DISTRICT

13BLOCKS FROM

GOLDEN 1 CENTER

1BLOCK FROM MIDTOWN

FARMERS’ MARKET

3BLOCKS FROM THE

CONVENTION CENTER

9BLOCKS FROM SUTTER MEDICAL CORRIDOR

13BLOCKS FROM

DOCO / SAWYER Easy access to the American

River Bike Path: 32 miles

of paved trail following

the length of the American

River.

WPTHE


1 8 1 9

Midtown to the east; Downtown to the west. Employees, residents, etc of the WP can enjoy being centered in the urban core with easy acess to every corner of the city.

NE A RB Y A MENI T IES

POPULAR RESTAURANTS NEAR WP (NOT ALL ARE MENTIONED HERE):

58 Degrees & Holding Co.

Ace of Spades

Aioli Bodega Espanola

Amaro Italion Bistro & Bar

Art of Toys

Azul Mexican

Badlands

Bar West

Bento Box

BevMo

Block Butcher Bar

Beast & Bounty

Bottle and Barlow

Broderick Midtown

Buckhorn Grill

Burgers and Brew

Café Bernardo’s

Cantina Alley

Centro Cocina Mexicana

Chipotle

Cornerstone

Crepeville

Der Biergarten

Dos Coyotes

Eatuscany Cafe

Elixir Bar & Grill

Faces

Federalist Public House

Fieldwork Brewing Co.

FishFace Poke Bar

Fit Eats

Fox & Goose Public House

Ginger Elizabeth Chocolates

Grange

Highwater

Hot Italian

I Love Teriyaki

Identity Coffee

Iron Horse Tavern

Jack’s Urabn Eats

Karma Brew

Kru Japanese

Bombay Bar & Grill

Kupros Craft House

Lowbrau

Lucca

Luna’s Cafe & Juice Bar

Mago’s/Burgertown

Make Fish

Mercantile Saloon

Metro Kitchen & Drinkery

Mikuni Sushi

Monkey Bar

Mulvaney’s B&L

N Street Cafe

Nekter

Nido

Nishiki Sushi

Old Soul Coffee

Pachhamama Coffee Coop

Paesano’s

Paragary’s

Pizzeria Urbano

Portofino’s

Press Bistro

Pronto Pizza

Pushkin’s Bakery

Q Street Bar & Grill

R15

Red Rabbit

Rick’s Dessert Diner

Roxie Deli and Barbeque

Saddle Rock

Sakamoto

See’s Candies

Shady Lady

Shoki Ramen House

Skool

Squeeze Inn

Sun & Soil Juice

Tank House BBQ

Tapa the World

Tea Cup Cafe

Temple Coffee

Thai Basil

Thai Canteen

The Bread Store

The Golden Bear

The Mill Coffee House

The Porch

The Press

The Rind

The Waterboy

Tres Hermanas

Uncle Vito’s Pizza

University of Beer

Waffle Square Country Kitchen

Yogurt a GoGo

Zelda’s Pizza

Zocalo

WP BUILDING

SOUTHSIDE PARK

STATE CAPITOL

ROOSEVELT PARK

SUTTER’S FORT

WINN PARK

TRUITT BARK PARKFREMONT PARK

16TH

P

R

20TH

L

PROPERTY LOCATIONWPTHE

A strong recovery has bolstered the redevelopment of Downtown and Midtown, and many residents choose those

neighborhoods because of their proximity to nearby jobs, plus the opportunity to live in a major city’s urban core

and the lifestyle that offers. Of the few projects to deliver in Sacramento in this cycle, a number have popped up in

Downtown and Midtown, and about a half-dozen other developments are underway. Renter demand has supported

these new communities, challenging the perception of those neighborhoods as an unappealing rental market for

high-end product.

Despite asking rates that are in the upper tier of the metro, the renewed interest in the Downtown Sacramento

Submarket allowed vacancy to reach an all-time low in 2017 and propelled solid rent growth in recent years. These

robust fundamentals have brought strong investor interest to the submarket since 2015.

Although the submarket’s vacancy level slightly expanded in 2016 due to new supply, the quick lease-up of new

deliveries has kept occupancy well above the historical average. As of 18Q2, vacancies were about in line with the

submarket’s 17Q4 all-time low, as demand has remained steady. Among the neighborhoods in Downtown Sacramen-

to, Midtown typically boasts some of the tightest vacancies. This is likely due to the younger generations, who are

attracted to the abundance of coffee, breweries, restaurants, bars and events.

Multifamily Rents: Midtown & Downtown Sacramento command some of the highest asking rents in the metro. The

average asking rate is $1,390, about 5% higher than the metro average. The submarket’s 4 & 5 Star properties

receive a hefty premium over the rest of the inventory—rent averages almost 50% higher than the submarket

average. Virtually all of the 4 & 5 Star properties are in the Midtown and Downtown neighborhoods, and many of

them border 16th and 19th Street. Midtown & Downtown Sacramento has enjoyed gains in recent years that have

far outpaced the submarket’s historical average. From 2014–16, rent growth averaged about 5%, or double the

submarket’s historical average. As with the metro average, submarket gains have declined since 2017. Year-over-

year rent growth is currently 2.5%, about in line with the submarket’s historical average. With only 500 units under

construction as of 18Q2, there will be significant room for more development.

MULT IFA MILY

S E C T I O N F I V E : T H E D E M A N D

2 0 2 1

DEMANDAlthough urban infill projects in Sacramento are gaining momentum and reaching all-time highs, we are

simply not meeting current demand. Population flows are showing that Sacramento is and will

continue to benefit from Bay Area migration and accommodating those who are seeking a

more affordable Californian lifestyle. Sacramento’s urban core, and more spe-

cifically Midtown, offers the highest quality urban experience at the

most affordable level relative to comparable urban centers

in California.

Only 557 units scheduled

in the next 4 quarters.

Expected high rental

growth, low vacancy and

new construction.

557 UNITS355 UNITS20 173 UNITSDELIVERED PAST 4 QSALL-TIME ANNUAL AVG UNITS PROPOSED NEXT 4 QSDELIVERED NEXT 4 QS

WPTHE

Some of the highest rents in Downtown Sacramento can be found at the 1801 L Street and 16 Powerhouse (both are

walking distance from subject property). These properties—along with all 4 & 5 Star units—are considered pricey

for long-time Sacramento residents, but are bargains for those migrating from the Bay Area.

35% of Apartments.com searches in Sacramento are coming from outside of the region. Of that grouping, 27% of

the searches for apartments are coming from the San Franciso/Oakland/San Jose region. People want to leave the

extremely high cost of living but want to stay in California.

Strongest and safest development category has been to build new housing and construction starts have been up for

2017/18. Apartment vacancies for the Sacramento region are approximately 4.5% and will either maintain or drop

due to limited new deliveries.

Meaning new supply relative to the demand has largely been absent from the metro as a whole this cycle, but

a rapidly growing population and employment base hasis slowly beginning to sparked renewed interest in urban

development. A study by the Sacramento Area Council of Governments projected that there will be a major empha-

sis on urban infill in the coming years, rather than suburban growth, and the proposed pipeline backs it up. New

plans for projects both Downtown and Midtown largely focus on the abundance of underutilized parcels in these

neighborhoods.

MULT IFA MILY


2 2 2 3

Sacramento had the largest

% gain in population of

the ten largest cities in

California

WPTHE

(A/O)

The influx of new Bay Area residents is also having positive impacts on the labor and office markets. Unemployment is below the country’s average and hovering

at 4% while the office sector has expanded to consume a majority of surplus vacancy, which now hovers at a low of 9.7%. 2Q18 data in every sector of the office

market was positive, from leasing activity to investment sales to square-feet absorption. Office vacancy rates are in single digits for the first time in twenty years

and there is limited new office product. Existing office vacancies are not meeting current tenant specifications at this point. Office requirements are changing and

focusing on creative and collaborative space that is centrally located in cultural hubs.

Sacramento’s office market has benefited this cycle from job growth largely outpacing the national average, limited new inventory, and steady demand. As a result,

rent growth as of 18Q3 was among the strongest in the nation at about triple the tepid national average. Vacancy has also benefited from these dynamics, with the

mark trending around single-digits and about in line with the national rate. While investment activity hasn’t neared its levels from the previous cycle, annual volume

has topped $1 billion the past two consecutive years, and 2018 investment is on pace to again reach that mark. Sales this year have been propelled in part by the

trade of one of the most prominent office assets in the metro.

Unlike neighboring Downtown, the Midtown submarket consists of almost exclusively of smaller low-rise buildings. The only new construction Office space in the

urban core either has a preleased component to it (Kings moving into Doco and Kaiser moving into 601 J Street) with the only speculative office investment being

the Ice Blocks development.

The last significant delivery here had been 2600 Capitol, which completed in 2009. The 4 Star 55,000 SF property was developed by local firm Heller Pacific, the

same developer who is now delivering Ice Blocks. A mixed-use redevelopment of an old vacant warehouse at 16th and R streets, Ice Blocks consists of 142 mar-

ket-rate apartment units, plus the 138,850 SF office building (Ice Shop), which includes ground-floor retail space. As of August, the office building is expected to be

fully leased in the next quarter. Asking rents were roughly 40% higher than the submarket average as of 18Q2. There are more letters of intent than available square

footage at the project. Tenants are looking for a well curated, thoughtfully designed, creative spaces that are centrally located with abundant amenities.

Turton Commercial has handled the multiple iterations of Ice Blocks. The 138,500 SF spec building completed construction in May 2018 and will be 100% leased

as of Q42018. There are significant tenant requirements that are looking for high end creative office space. Demand exceeds limited supply and are willing to pay a

premium. A similar style project in size and scope would be very successful and attract high quality tenants paying estimated rents that range in the $3.15-3.25/SF/

FSG range with 10 year lease terms, $75/SF in Tenant Improvements and 2/1000 parking. New construction is very limited in both Downtown and Midtown submar-

kets. With the exception of the proposed Tribute Building at 21st and L Street, there are no new construction projects of note and limited future deliveries.


OFFICE

2 4 2 5

4.7%7.4%139 K 87 K12 MO NET ABSORPTION12 MO DELIVERS IN SF 12 MO RENT GROWTHVACANCY RATE

WPTHE

Sacramento is a top-10 market nationally for hotel demand growth. A combination of surging demand and little new

hotel construction made Sacramento one the top 10 markets nationally for hotel room revenue and demand growth

according to CBRE Hotels.

The metric of revenue per available room, or RevPAR, rose 10.2 percent last year in Sacramento with demand

growth, of just under 6 percent, put the region ahead of larger markets such as New York City and Chicago. Both

figures were in the top 10 nationally.

Sacramento is typically a market, where demand is driven by its status as a government town. But beginning about

five years ago, local economic indicators such as jobs and wages began to improve, which pushed demand for hotel

rooms.

With all the economic indicators that have been positive while the supply side of the equation has been relatively

minimal thus creating an opportunity for hotel developers. Hotels around downtown Sacramento are running at

record levels for occupancy.

While there are several conceptual hotel developments being proposed in Downtown, there are no hotel develop-

ments in the works in Midtown. The advent of flexible transportation such as on-demand ride hailing services and

renting power assisted bikes makes Midtown a natural choice for the adventurous traveler who is looking for a

central location but doesn’t want to sacrifice the opportunity to have an authentic and fulfilling experience.

New projects in the Sacramento region represent approximately 1,800 new rooms, will increase that total market

size by 3.7 percent. And Sacramento hotel RevPAR is still expected to grow in the next couple years, Kraus said.

Average room rates may dip slightly, however, as new supply may outstrip demand.

HOSPI TA L I T Y


2 6 2 7

Currently there are

no proposed hotel

developments in the works

in Midtown.

WPTHE

LIFESTYLE

L ANDSALE

COMP SA list of recently-executed land sales of comparable quality

S E C T I O N S I X : C O M P A R A B L E C O M P S

3 0

WPb u i l d i n g

Seller: 601 CM LLC

Square Feet:38,972

601 CAPITOL MALL (SOLD APRIL 2018)

Sale Price:$7,000,000 ($180 / LAND SF)

Buyer: Shorenstein Properties

Zoning:C3-SP

Adjacent to 621 Capitol Mall office tower. South of Golden One Center.

Seller: Cordano Company

Square Feet:27,199

831 L STREET (SOLD JANUARY 2017)


Buyer: Eva hill

Zoning:C3-SP

Future redevelopment play into mixed-use. Building sale.

Seller: City of Sacramento

Square Feet:28,800

800 K STREET (SOLD JANUARY 2017)


Buyer: Sacramento Kings

Zoning:C3-SP

Future development site.

Seller: Ashley Payne

Square Feet:16,301

1601 L STREET (SOLD JULY 2016)


Buyer: CNCDA

Zoning:C2

Future development site.

3 1

CRE AT IVE DE A L SWPTHE

S E C T I O N S I X : C O M P A R A B L E C O M P S

3 2

WPb u i l d i n g

Seller: Coyle Properties, Inc.

Square Feet:9,287

1830 L STREET (SOLD APRIL 2015)


Buyer: Ridge Capital, Inc. Zoning:

C2

Current Golden Road Brewery site.

Seller: Zachariah Family Trust

Square Feet:12,800

1831 J STREET (SOLD JANUARY 2017)


Buyer: Mo Mohanna Zoning:

C2

Currently under development for 173 residential units over retail.

Seller: Andrew Edwards

Square Feet:13,569

1631 K STREET (SOLD APRIL 2018)


Buyer: D&S Developments Zoning:

C2

Planned mixed-use development of former Sac Ballet building.

Seller: The Pacific Companies

Square Feet:25,600

1601 H STREET (SOLD NOVEMBER 2017)


Buyer: Grupe / SKK Zoning:

C2

Planned mixed-use development of 100+ units.

Seller: The Pacific Companies

Square Feet:51,200

700 16TH STREET (SOLD NOVEMBER 2017)


Buyer: Grupe / SKK

Zoning:C2

Planned re-do of the Clarion Hotel into mixed-use, hotel, and residential.

601 Capitol Mall 800 K & 831 L Street

1830 L Street1601 H & 700 16th Street1831 J Street

Sacramento economy on solid footing with job growth has largely outpaced U.S. job gains since 2012, unemployment rate about 4%.

Although development is at an all-time high for Sacramento’s central city, there is still limited new supply in every sector including office,

multifamily, retail and hospitality in the Central City this cycle. Sacramento continues to be in the top 10 markets nationwide for multifamily

and hospitality. The office market benefits from constrained supply and continued expansion. The location of this development site is argu-

able the best site in the central city benefitting from the cultural hub that is Midtown and the proximity to Downtown. While rents across as

sectors have climbed and not justify new construction, Sacramento is and will continue to be far more affordable than the Bay Area.

WPTHE

WPTHE

Project: 800 J

Size:225 Units over ±12,000 SF retail

Address: 800 J Street

Developer: CIM Group

Project: 16 Powerhouse

Size:50 Units over ±8,000 SF retail

Address: 1606 P Street

Developer: D&S Development

Project: 1801 L Street

Size:170 units over retail

Address: 1801 L Street

Developer: SKK Developments

Project: Fremont Mews


Address: 1400 P Street

Developer: Rembold

Project: Legado De Ravel


Address: 1520 16th Street

Developer: Ravel Rasmussen

Project: Eviva


Address: 1531 N Street

Developer: Urbancore

Project: Ice House


Address: 1710 R Street

Developer: Heller Pacific

LIFESTYLE

RADPROJEC T SUNDERWAY

What a time to be alive.#SacramentoRising

S E C T I O N S E V E N : N E A R B Y C O M P A R A B L E P R O J E C T S

3 4 3 5

COMP L E T EDWPTHE

WPTHE

Project: Cap. Park Penthouses

Size:19 units over hotel over retail

Address: 1127 15th Street

Developer: FPI

Project: Warehouse Artist Lofts

Size:116 affordable units over retail

Address: 1108 R Street

Developer: CFY Development

Project: Kimpton / Sawyer Hotel

Size:45,000 SF of retail, 35,000 SF of office,250 hotel rooms,and 44 for-sale residences


Developer: Sacramento Kings

Developer: D&S / CFY Development

Developer: Sacramento Kings


Project: The Hardin


Address: 700 K Street

Project: 800 Block



Project: 1430 Q


Address: 1531 Q Street


Developer: SKK / Grupe

Developer: SKK / Grupe

Developer: Ryan Heater

Developer: Mo Mohanna

Project: K17

Size:40+ units over hotel over retail


Project: 20 PQR

Size:32 units with some retail

Address: 20th & Q Streets

Project: The Press


Address: 21st & Q Streets

Project: Yamanee

Size:134 condos over 11,000 SF of retail


Project: 19J

Size:173 units over 7,000 SF of retail

Address: 19th & J Streets

S E C T I O N S E V E N : N E A R B Y C O M P A R A B L E P R O J E C T S

UNDERWAY

3 73 6

WPTHE

2 8 2 9

S E C T I O N S E V E N T : N E A R B Y C O M P A R A B L E P R O J E C T S

NE A RB Y DE VEL OP MEN T

There are currently nine multi-family mixed use projects slated for development over the next two to three years.

This will create as many as 1,200 new units on the market averaging about 600 sf per unit. I Even with that much

development, recent studies conducted by Bay Area Economics in coordination with CADA have indicated demand

for high end residential to be as much as 5,000 – 6,000 units (or even higher) over the next decade… and there is

very little infill land remaining to be purchased and developed.

700,0009 270,000SF OF NEW OFFICE/RETAILMAJOR NEW DEVELOPMENTS SF OF NEW RESIDENTIAL

Studies indicate even if the

market can produce another

2,000 fair market units in

the next 2 -3 years it will be

thousands below demand.

WP BUILDING

Map: Comparable Projects Completed Underway Subject Properties WPTHE

JOHN MUDGETTD.R.E. LIC. 01711650916.573.3306JOHNMUDGET [email protected]

KEN TURTOND.R.E. LIC. [email protected]

2409 L STREET, STE 200 SACRAMENTO, CA 95816

916.573.3300 TURTONCOM.COM

© 2018 The information contained in the Offering memorandum is confiden-tial and provided solely for the purpose of review by prospective purchasers of the WP Building and is not to be used for any other purpose or made available to other persons without the express written consent of Turton Commercial Real Estate (“TCRE”) or Ken Turton. The material contained herein is based upon information supplied by owner in coordination with information provided by TCRE from sources it deems reasonably reliable. Summaries of documents are not intended to be comprehensive or all-inclusive but rather a general outline of the provisions contained herein and subject to more diligent investigation on the part of the prospective purchaser. No warranty, expressed or implied, is made by owner, TCRE or any other respective affiliates, as to the accuracy or completeness of the information contained herein or any other written or aral communication provided to a prospective purchaser in the course of its evaluation of the Property. No legal liability is assumed or to be applied in connection with the information or such other communication. Without limiting the general nature of the foregoing, the information shall not be deemed a representation of the state of affairs of the Property or constitute an indication that there has been no change in the business affairs, specific finances or specific condition of the Property since the date of preparation of the information. Prospective purchaser shall make their own projections and conclusions without reliance upon the materials contained herein and conduct their own independent due diligence, inspection and review of the Property, including but not limited to engineering and environmental inspections, to determine the condition of the Property and the existence of any potential hazardous material located at the site.This Offering Memorandum is subject to prior placement, errors, omissions, changes or withdrawal without notice and does not constitute a recommen-dation, endorsement or advice as to the value of the Property by TCRE or the Owner. Each prospective purchaser is to rely upon its own investigation, evaluation and judgement as to the advisability of purchasing the Property described herein. TCRE is not authorized to make any representations or agreements on the part of the Owner.

JON LANGD.R.E. LIC. 01934934916.573.3302JONL [email protected]

AARON MARCHANDD.R.E. LIC. 01219637916.573.3305A [email protected]

Documents

TURTON - LoopNet