2017 Q4 Inland Empire Office Market Snapshot
In the fourth quarter of 2017, total vacancy rate for the Inland Empire office market decreased 50 basis points from 13.9% last quarter to 13.4%. The decrease in vacancy pull stems from the San Bernardino submarket, which recorded a decrease of 240 basis points. The fourth quarter closed with positive absorption recording at 99,000 square feet (SF). Leasing activity grew by 43% compared to last quarter, recording 412,800 SF for the quarter.
The weighted average asking rental rate increased during fourth quarter to $1.78 per square foot (PSF), full service gross (FSG). As a historical perspective, one year ago the asking rental rate
recorded at $1.72 PSF FSG.
Four of eight submarkets witnessed positive net absorption with San Bernardino recording the highest at 119,400 SF and the Rancho Cucamonga submarket recording the lowest at -57,400
Among building classes, Class C office led net absorption 69,100 SF for the quarter, while Class A had the lowest quarterly absorption at -32,100 SF.
The unemployment rate for the Inland Empire was 4.8% as of November 2017, adding 42,800 non-farm jobs to the region over the past year.
Construction registered the greatest year-over-year gain, adding 14,700 jobs. Specialty trade contractors accounted for 84% of the job growth in this sector. Another bright spot was leisure and hospitality, which has grown by 8,000 jobs over the past year.