The North Bay commercial real estate market is experiencing shifts, with Marin County seeing a surge in apartment sales but increased vacancies. Office spaces in Santa Rosa remain stable despite hybrid work trends, while Napa and Solano counties report new leasing activity.
Each spring North Bay Business Journal invites top commercial real estate brokers from around the region to submit analyses of their markets. Here are their takeaways on what’s being built, what’s in demand and who is moving around.
Sonoma County:
- Santa Rosa office real estate vacancy has remained flat over the past three years, yet rental rates have stabilized. Meanwhile, hybrid work models have led to smaller leases as companies downsize office footprints, writes Dave Peterson of Keegan & Coppin Co. Inc.
- Office and industrial real estate vacancies increased in north Santa Rosa, Windsor and Healdsburg due to company departures, but some big deals are taking a lot of space off the market, writes Shawn Johnson of Keegan & Coppin Co. Inc.
- Petaluma office and industrial real estate vacancy rates remain high heading into 2025, but increased transactions and buyer flexibility signal renewed confidence and opportunities in industrial, office and combination (flex) spaces, writes James Manley of Keegan & Coppin Co. Inc.
- The Rohnert Park and Cotati commercial real estate market remains flat in early 2025, with rising vacancies but steady demand for industrial and retail spaces. Favorable conditions for tenants and investors present new opportunities amid economic uncertainty, writes Kevin Doran of Keegan & Coppin Co. Inc.
- Sonoma County’s multifamily investment property market faced stagnation in 2024 due to high borrowing costs, with modest rent growth and increased vacancies. Despite challenges, new developments and potential stabilization are expected in 2025 as investor activity resumes, writes Scott Gerber of NorCal Commercial.
Napa and Solano counties
- Downtown Napa is set for major changes with new hotels, residential developments, and retail shifts. Approved projects aim to boost tourism and business, while new shops replace longtime favorites, reshaping the city’s vibrant landscape, writes Michael Holcomb of W Real Estate.
- Napa and Solano counties have seen a surge in leasing activity and new construction, with high-quality office and industrial spaces in demand, despite a slight rise in vacancy rates as wine industry demand has slowed, write Glen Dowling, Matt Bracco and Chris Neeb of JLL.
Marin County
- Marin County apartment sales surged 2.5 times last year, but prices fell and rents declined as vacancy increased, writes Katherine Higgins, apartment property agent at Berkshire Hathaway/Drysdale Properties Commercial Property Group in San Rafael.
- The office market in southern and central Marin County remains steady, with rising rental rates, limited tenant activity, and a focus on smaller office spaces as larger employers evaluate remote work, writes C. Whitney Strotz of Cushman & Wakefield.
- Marin County’s office market is set to benefit from employers leaving San Francisco and other cities, yet redevelopment into residential properties is gaining traction locally. Remote work continues to impact lease sizes, while demand from health companies and owner-user buyers increases, writes Haden Ongaro of Newmark.
With new federal leadership and changing policies, the commercial real estate market in Marin, Sonoma and Napa counties faces uncertainty around lending restrictions, interest rates, and tariffs impacting business investment and growth, writes Al Coppin of Keegan & Coppin Co. Inc.
Read more on these stories: nbbj.news/cre