El Dorado Hills is one of the more supply-constrained commercial markets in the Sacramento region, and 2026 is testing that. A warehouse club is proposed, a 97-acre mixed-use plan is moving through review, and the office side is softening even as the retail trade area stays busy. For an owner or investor, the interesting question is where the demand is heading. Here is the current picture.
What major commercial projects are proposed in El Dorado Hills?
Two stand out. A proposed Costco near the El Dorado Hills Business Park would bring a roughly 165,000-square-foot warehouse store plus a fuel station with 32 to 42 pumps on a site of similar acreage. It is still in environmental review, with a draft EIR released and a decision not expected until late 2026 or early 2027.
Further along the planning track is the Gateway El Dorado Specific Plan, a 97.74-acre mixed-use proposal near Latrobe Road and Golden Foothill Parkway. It would add commercial zoning for somewhere between 563,000 and 724,000 square feet of non-residential space, plus 140 to 493 multifamily units. It is early in the process, but the scale signals where the market wants to grow.
Both point the same direction: retail and mixed-use demand in El Dorado Hills is strong enough to justify large new footprints.
What is driving demand in El Dorado Hills?
Two things reinforce each other. It is one of the highest-income communities in the region, so household spending power supports retail, restaurants, and services at a level many submarkets cannot. And commercial land is genuinely scarce there, hemmed in by topography and existing development, which keeps supply tight even as demand grows.
High spending power meeting constrained supply is the classic setup for a landlord-favorable retail market and for the kind of large proposals now in the pipeline. It also explains why a national warehouse club would fight through a multi-year entitlement to land there.
How is the El Dorado Hills office market doing?
Softer than retail. Office vacancy in the El Dorado Hills submarket ran about 14.5% in Q1 2026 per Colliers, with slightly negative absorption and asking rents near 2.09 dollars per square foot. Kidder Mathews, using a wider El Dorado boundary, put vacancy at 13.5% with rents near 2.16 dollars. Either way, this is an elevated-vacancy office submarket, which tends to favor tenants and owner-users over landlords right now.
| El Dorado Hills office (Q1 2026) | Vacancy | Asking rent |
|---|---|---|
| Colliers (EDH submarket) | ~14.5% | $2.09 / SF |
| Kidder Mathews (wider El Dorado) | ~13.5% | $2.16 / SF |
That gap between a busy retail trade area and a soft office market is the kind of split that creates specific opportunities, an owner-user buying their own building at a favorable basis, for example, rather than leasing.
How should an owner-user approach that soft office market?
As a window. When office vacancy sits in the low-to-mid teens, a buyer who intends to occupy the space has leverage a tenant in a tight market never gets: room to negotiate price, tenant improvement dollars, and terms. For a practice or business that wants to plant roots in El Dorado Hills anyway, buying into a soft office market can lock in a favorable basis right as the surrounding retail trade area keeps strengthening.
The caution is the usual one. A softer submarket means you should be confident in the specific building and your long-term use, because you are buying for occupancy and equity, not for a quick lease-up. But for the right owner-user, the current office softness is an opening, not a warning.
Does a strong events calendar matter for commercial real estate?
It does, as a signal. A trade area that draws people consistently supports the retail and restaurant tenants that fill commercial space. El Dorado Hills Town Center runs a Saturday farmers market and a Live on the Boulevard concert series through mid-August, along with a weekly Cars and Coffee and a summer art exhibition, and the annual Brewfest lands in early September. None of that is a real estate metric, but a district that stays this active is a district where retail space keeps working. That is part of why the trade area supports proposals at the scale of a new Costco.
What does this mean for owners and investors?
The pattern in El Dorado Hills is a retail and mixed-use market with room to expand, sitting next to an office market that has softened. For an investor, that argues for focusing on the demand side, retail pads, mixed-use, needs-based space, rather than assuming every asset class moves together. For an owner-user, a higher-vacancy office market can be the moment to buy rather than rent.
You can see the local market detail on the El Dorado Hills commercial page, and if buying your own building is on the table, the owner-user commercial page covers how those purchases work. Owners weighing a sale and a move into another asset class can start with the 1031 exchange page.
FAQ
Is El Dorado Hills a good market for commercial investment?
It is a supply-constrained, high-income trade area, which supports retail and mixed-use demand. The office side is softer right now, so the answer depends heavily on asset class and the specific property.
What is driving commercial demand in El Dorado Hills?
High household incomes and scarce commercial land. Strong spending power meeting constrained supply supports retail and restaurants and drives large proposals like the Costco and the Gateway plan.
What is the El Dorado Hills Business Park?
It is the main commercial and employment district in El Dorado Hills, near Latrobe Road and US-50, home to office, flex, and retail uses and the focus of several current development proposals.
Is now a good time to buy office space in El Dorado Hills?
Office vacancy is elevated at roughly 13 to 14 percent, which generally favors buyers and owner-users. Whether it fits depends on the building and your use, so it is worth reviewing specific options.
Why would an owner-user buy into a soft office market?
Because higher vacancy gives a buyer leverage on price and terms. For a business that wants to be in El Dorado Hills long term, a soft office market can lock in a favorable basis while the retail trade area keeps strengthening.
What is the Gateway El Dorado Specific Plan?
A 97.74-acre mixed-use proposal near Latrobe Road that would add roughly 563,000 to 724,000 square feet of non-residential space plus 140 to 493 multifamily units. It is early in review.