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Inland Empire Office Market Outlook 1Q 2018

05/01/2018
Published By: NAI Capital Research

MARKET OVERVIEW
The Inland Empire office market continued the trend of positive momentum
with little excitement after getting off to a slow start in 2018. The Inland
Empire enjoyed one of the lowest vacancy rates since 2007. The vacancy
rate registered at 7.9% despite over 100,000 SF of new deliveries. This
represented a 40-basis point drop over the quarter and a decline of over
100 basis points over 1Q 2017. The average asking rent was $1.81/SF,
down 3.2% from 4Q 2017 and down 0.6% from last year at this time. The
healthcare industry drove most of the new growth in the office sector. Office
medical space comprised more than half of the projects under construction
at the end of the first quarter. Construction consisted of nine projects totaling
201,671 SF, the largest of which was Rady Children’s Medical Plaza at
60,000 SF. Demand heightened as the Education & Health Services sector
saw 4.0% employment growth between February 2017 and February 2018.
This accounted for 8,700 of the 14,800 new jobs in the office occupying
sectors. Over the same time, total employment grew by 55,600 jobs and
the Inland Empire’s overall unemployment rate dropped from 5.6% to 4.4%.

Release Date05/01/2018 - 11:49

Source

NAI Capital

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