2017 Q2 Inland Empire Office Market Snapshot
In second quarter 2017, the total vacancy rate for the Inland Empire office market decreased 40 basis points from 13.9% last quarter to 13.5%. The vacancy rate has been steadily declining since peaking at 25.2% in late 2010. Second quarter closed on a positive note as net absorption recorded 63,300 square feet (SF) for the quarter. Leasing activity grew by 30,000 SF compared to last quarter recording 284,300 SF for the quarter.
The weighted average asking rental rate slightly decreased during second quarter to $1.78 per square foot (PSF), full service gross (FSG). As a historical perspective, the asking rental rate recorded at $1.72 PSF FSG on year ago.
Six of eight submarkets witnessed positive net absorption with Riverside recording the highest at 37,800 SF and the Rancho Cucamonga submarket recording the lowest at -18,500 SF.
The unemployment rate for the Inland Empire was 4.5% as of May 2017, and experienced job growth of 2.9% over the last 12 months.
The Inland Empire office market is comprised of 20.4 million SF, representing seven percent of the total inventory of office buildings 25,000 SF and greater in the Los Angeles basin. Construction registered the greatest year over year gain, adding 16,500 jobs. Specialty trade contractors accounted for 87 percent of the job growth in this sector. Another bright spot is trade, transportation and utilities, which has grown by 6,600 jobs over the past year.