Inland Empire Office Market Snapshot
In the final quarter of 2016, the total vacancy rate for the Inland Empire office market decreased 60 basis points from 15.2% last quarter to 14.6%. The vacancy rate has been steadily declining since peaking at 25.2% in late 2010. Net absorption was positive 126,800 square feet (SF) for the quarter and 246,900 SF for the year. Leasing activity was 216,700 SF for the quarter and totaled 997,000 SF for all of 2016.
The weighted average asking rental rate remained unchanged during fourth 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.
Five of eight submarkets witnessed positive net absorption with Rancho Cucamonga recording the highest at 84,200 SF and the Chino / Chino Hills submarket recording the lowest at -35,300 SF.
Among building classes, Class A office led with net absorption at 106,400 SF for the quarter while Class B had the highest yearly absorption number at 144,800 SF.
The unemployment rate for the Inland Empire was 5.5% as of November 2016, and experienced job growth of 2.5% over the last 12 months. Government registered the greatest year over year gain, adding 10,700 jobs. Local government accounted for 82 percent of the job growth in this sector. Another bright spot is educational and health services, which has grown by 9,100 jobs over the past year.