2018 Q1 Inland Empire Office Market Snapshot
In the first quarter of 2018, the total vacancy rate for the Inland Empire office market decreased 90 basis points from 13.4% last quarter to 12.5%. The decrease in vacancy stems from the Rancho Cucamonga submarket, which recorded a decrease of 270 basis points. The fourth quarter closed with positive absorption recording at 168,600 square feet. Leasing activity recorded 272,200 square feet, which falls within the three-year average.
The weighted average asking rental rate increased during first quarter to $1.77 per square feet full service gross. As a historical perspective, one year ago the asking rental rate recorded at $1.79 PSF FSG.
The unemployment rate for the Inland Empire was 4.5% as of January 2018, adding 52,200 non-farm jobs to the region over the past year.
Financial activities registered the greatest year-over-year gain, adding 600 jobs. Trade, transportation and utilities recorded a loss of 12,000 jobs followed by professional and business services decreasing by 3,700 jobs year-over-year.
Six of eight submarkets witnessed positive net absorption with Rancho Cucamonga recording the highest at 77,900 square feet and the San Bernardino submarket recording the lowest at negative 51,300 square feet. Among building classes, Class B office led net absorption at 82,800 square feet for the quarter, while Class A had the lowest quarterly absorption at 42,100 square feet.