Client: Alleghany Properties, Inc.

Alleghany Properties engaged GG+A to study the potential demand for retail and office uses at the Natomas Crossings site in Natomas, Sacramento, California. The 277-acre site is bounded to the north by Del Paso Road, to the west by East Commerce Way, to the south by San Juan Road, and in between Interstate 5 and Interstate 80.

GG+A estimated the potential size and make-up of retail uses for the Natomas Crossing site. GG+A identified the factors that encourage demand or locational strengths of the area and site and potential constraints on demand. GG+A prepared a quantitative assessment of the primary market area and secondary market area demand, both in terms of available dollars and supportable space. GG+A identified and evaluated the present and anticipated future supply competition. GG+A compared the relationship between present and future demand and supply in the primary market area and secondary market area to identify the relative intensity of competition for the sales dollars of consumers and the potential for the market to support new retail development at Natomas Crossing.

GG+A also prepared a “White Paper” entitled Anticipating the Future: Revolutionary Changes and Implications for Planning For Natomas Crossing Development and Policy For City of Sacramento. This White Paper reviewed key demographic and income demand shifts and supply trends pertaining to the Sacramento region and suggested the public policy implications of those shifts. The information gained from the market reconnaissance in conjunction with the insights about demographic and income demand shifts and supply trends and interviews with potential anchor tenants, brokers and developers were used to identify a retail development strategy.

GG+A described macro trends that will impact future office space demand. Based on interviews with developers, brokers and office building owners and review of tenant movements, GG+A defined the primary market area within which the Natomas Crossing site will compete for office users and identified the relevant geographic submarkets as well as the likely geographic origins of potential office space users. Drawing on the interviews and evaluation of supply, GG+A reached judgments on the competitive position of the Natomas Crossing site. GG+A reviewed office supply conditions, including building space development, space absorption, vacancy, and rental rate trends by submarket. GG+A identified potential future office space supply additions. GG+A analyzed historical employment growth by economic sector and the relationship between employment growth and office space development.

Based on this analysis, review of a public agency forecast of Sacramento County employment and the interviews, GG+A forecast employment by economic sector for the primary market area. G+A also completed research on trends in office space employment densities. GG+A forecast office building space demand. GG+A estimated the amount of land needed to accommodate the forecast office space demand and compared the relationship between forecast office space and land demand and identified building space and land supply. GG+A estimated the share of demand the Natomas Crossing site could capture. GG+A drew conclusions about development strategy for office space and the need to re-entitle the site to accommodate other uses that would both make the site more desirable for office uses and reflect the finding that too much of the site was allocated for office uses.