By Mike Hazlip—
Andy Sartori, owner of Citrus Heights based MealPro, sees reasons to be optimistic that demand for office space will increase, 1.85 million of them, he said.
Sartori acquired 11231 Gold Express Drive last month for $1.85 million, telling The Sentinel that he would have preferred to make the purchase in Citrus Heights, but did not find suitable office space in the city.
He plans to keep the manufacturing facility for MealPro, Sartori’s meal delivery business, at 7421 Greenback Ln. in Citrus Heights where he says the business can continue to grow.
“We are incubated and probably even more than incubated in Citrus Heights,” Sartori said. “Citrus Heights is still like a growth stage of business, always based in Citrus Heights and we’re just looking for a different type of setup.”
Sunrise Mall could be an ideal location for future office space, he said, something that is part of the Sunrise Tomorrow plan.
Related: Sunrise Mall ‘Tomorrow’ plan to get a piece of $22.5 million grant
The move comes after a bearish report on office space in the Sacramento region by Colliers. The report says there was an increase of 24 basis points in the market vacancy rate for the year-over-year fourth quarter of 2023. About 20 percent of the total office space in the Sacramento region was vacant at the time of the report, marking six consecutive quarters of occupancy losses, Colliers reported.
In Citrus Heights alone, there was 845,416 total square feet of office space, with about 12 percent vacancy, according to Colliers. The fourth quarter net absorption was -6,694 square feet of Citrus Heights office space with a year-to-date net absorption of 24,775 square feet in 2023.
The report predicts a peak in employees working from home in the Sacramento Region, based on a slight decline from 23.3 percent in 2021 to 19.8 percent in 2022.
“The office sector has experienced significant upheaval over the last four years,” the report says. “The rapid pace of change has created uncertainty and speculation on the future of the office. Analyzing current trends, it appears the Sacramento office market will see additional occupancy losses and rising vacancy rates throughout much of 2024.”
In a follow-up email about the Colliers report, Sartori said there is more to the office space market than what he called the report’s quantitative analysis shows. Several qualitative factors played a role in his decision, including high-end finishes, floor-to-ceiling windows, overall layout, and street visibility, he said.
Citing a positive net absorption for the downtown central district, Sartori said properties with more appealing architecture and interior amenities are still in demand.
“Suburban class B appear to be struggling the most,” he said, noting that while the buildings are more affordable, they don’t have the “wow” factor due.
Converting some class B office buildings to light industrial might be one way Sartori says could bring tenants and employees to un-leased suites. His own MealPro business uses the former Lucky Derby casino in Citrus Heights to produce meals that are shipped to his online subscribers.
Sartrori is betting on a return of employees to the workplace, saying shared office space helps teamwork and makes it easier to manage productivity. Working together is encouraged in other sectors, he said.
“From my perspective, I have 1.85 million reasons to believe that office is better,” he said. “If we’re all in the same room, I just think it’s easier to see how the culture comes together and, to have more cohesion.”
From 2021: An inside look at MealPro’s new Citrus Heights headquarters
