Inland Empire Q4 2018 Office Market Overview
- Vacancy rates have increased to 11.4% since Q3
- Q4 showed absorption closing negative at 70,500 SF
- Unemployment has decreased to 3.9%
- Rental rates have increased to $1.83 PSF
The total vacancy rate for the Inland Empire office market increased 40 basis points in the fourth quarter of 2018 to 11.4% from 11.0% last quarter. The increase in vacancy stems from movement in the Riverside (up 310 basis points) and Corona (up 30 basis points) submarkets. The quarter closed with absorption recording negative 70,500 square feet, while leasing activity recorded only 233,300 square feet, a number that ranks below the three-year average.
The weighted average asking rental rate increased 2.8% during the fourth quarter to $1.83 per square foot (PSF) full service gross (FSG). As a historical perspective, one year ago the asking rental rate recorded at $1.78 PSF FSG. Although overall absorption recorded negative for the Inland
Empire office market, six of eight submarkets witnessed positive net absorption, with Rancho Cucamonga recording the greatest at 39,200 square feet and Riverside recording the lowest at negative 146,600 square feet. Among building classes, Class B office led net absorption at 46,100 square feet for the quarter, while Class A had the lowest quarterly absorption at negative 101,300 square feet.