Turton Commercial Marketing Entitled East Sac Hotel Site on Behalf of D&S Development

An office building in East Sacramento entitled for redevelopment as a 133-room hotel is on the market.

Turton Commercial Real Estate is listing the property at 3000 L St. on behalf of owner D&S Development, which decided not to pursue the project.

“We’re seeing great potential for someone else,” said Sara Lebastchi, D&S vice president of operations. She said company executives decided in recent months that hotel development is outside the urban infill company’s traditional expertise.

A listing for 3000 L St. on Turton Commercial’s website lists spaces in the building for lease and the overall building for sale, without a price. Listing brokers Ken Turton, Scott Kingston and Matt Axford were unavailable for comment.

The existing building, three stories and built in the 1980s, has four available suites, according to the listing. Those suites range from 1,402 to 2,325 square feet, with an asking rate of $2.65 per square foot per month, the online listing states.

After buying the building in 2021 for $3.3 million, D&S Development filed plans the following year for a six-story Homewood Suites at 3000 L St., with features such as indoor/outdoor fitness centers, an outdoor grill area and fire pits, and a food preparation area.

Lebastchi said the property would come with the entitlements for a hotel, which the city approved in August 2022. However, it’s not clear if those entitlements are still active, given a typical three-year period before they expire without an extension request or other mechanism such as a blanket extension on all active projects.

Local tourism officials have said the Sacramento region is hundreds of rooms short of needed hotel rooms to accommodate large events like the NBA All-Star Game, for example. But because they’re 24-hour operations, hotels are also more difficult to finance than other commercial developments because lenders are leery of taking back ownership of an ongoing concern if the hotel doesn’t perform under the loan.

Given its location by Sutter Medical Center, Lebastchi said, the existing office building would also presumably have interest from medical office types of tenants.