Inland Empire Office Market Snapshot
In third quarter 2016, the total vacancy rate for the Inland Empire office market decreased 80 basis points from 16.0% last quarter to 15.2%. A longer historical perspective shows the vacancy rate at 16.3% one year ago. Net absorption for third quarter was positive at 166,200 square feet (SF) compared to -54,300 SF one quarter ago. Leasing activity stayed above the three year historical average (230,000 SF) recording at 259,600 SF for third quarter.
The weighted average asking rental rate remained unchanged during second quarter at $1.72 per square foot (PSF), full service gross (FSG).
The average asking rental rate in the Inland Empire office market has been relatively flat over the past two years, fluctuating only $0.02 up or down over each quarter.
Six of eight submarkets witnessed positive net absorption with Ontario recording the highest at 39,700 SF and Rancho Cucamonga recording the lowest at -4,900 SF. Among building classes, Class B office led with net absorption at 130,600 SF.
The unemployment rate for the Inland Empire was 6.6% as of August 2016, and experienced job growth of 2.3% over the last 12 months.
Trade, transportation and utilities experienced the most gains in employment over the year adding 9,100 jobs. Government grew by 8,700 jobs and educational and health services grew by 5,200 jobs. Two industries that declined were mining and logging (down 100 jobs) and financial services (down 200 jobs).