Inland Empire Office Market.
The average asking rent fell $0.02/SF to $2.10/SF/Month from last quarter’s all-time high. The average is up 1.6% over the past year and has averaged 4.0% annual growth over the past three years. Vacancy climbed 60 basis points to 10.0% as the market registered 178,601 SF in net absorption losses. Total vacancy is lower than a year ago, when it stood at 10.6%. Sublease availability, representing only 0.7% of existing inventory, declined from already-low levels. Construction activity remains minimal, with three projects totaling 148,000 SF underway.Download Inland Empire Office Market Report 2Q23
Inland Empire Industrial Market
Total vacancy increased for the sixth consecutive quarter, going from 0.7% in early 2022 to 3.9% in the third quarter of 2023. Net absorption over this period totaled 13.4 MSF compared with 36.0 MSF in new construction deliveries. Available sublease space totals 10.1 MSF, a record high, and a jump of 54.0% from three months ago. Most occupiers are focused on cutting costs amid still-high inflation and more-restrained retail spending. Shedding extra space is one way to reduce overhead. Lease term lengths are trending down as tenants adopt a more cautionary stance. Some may be biding their time as they wait for rents to further decrease. Only 26.7% of the 39.8 MSF under-construction pipeline has pre-leased.