Real Estate Watch: Inland Empire
OC Opposite: Industrial Absorption, Tight Office Market
Industrial
The Inland Empire saw 4.7 million square feet of gross absorption and 3.8 million square feet of positive net absorption in the first quarter.
About 2.8 million square feet of new space came on the market in the first quarter, with 5.9 million remaining under construction.
The first quarter saw about 4.7 million square feet of gross activity. Ontario led the Inland Empire with 1.3 million square feet of sale and lease activity, or 28% of the region’s total.
Average asking manufacturing and warehouse gross lease rates ranged from a low of 22 cents a square foot per month to a high of 75 cents in the first quarter, producing an average asking gross lease rate of 39 cents. Office
The end of the first quarter hinted at a tightening office market. Positive net absorption continued for the 15th straight quarter. Vacancy rates continued to decline as lease rates held firm. The Inland Empire office vacancy rate decreased to 11.9%, the lowest rate in seven years. With strong activity in Rancho Cucamonga, Riverside and San Bernardino, the market saw 173,314 square feet of positive net absorption to begin the year.
At $1.45 per square foot, the average asking full service gross lease rate for office space increased four cents from $1.41 a year ago.
The vacancy rate has fallen continuously in the past 15 quarters from 25% in the second quarter of 1998 to its present low of 11.9%, a 52% decrease.
In the past 12 months, the average asking gross lease rate rose about 3% from $1.41 in the first quarter of 2001.
During the first quarter, 62,728 square feet were added to the office base as development wrapped up on three buildings. One new building in Riverside broke ground during the first quarter totaling 40,000 square feet.
During the second quarter of 2001, more than 259,000 square feet were added to the office base as development wrapped up on four buildings. Nearly 43% of the new deliveries were in Ontario. There are currently nine buildings totaling 318,338 square feet that are currently under construction to be completed in 2001.
Analysis provided by CB Richard Ellis Services Inc.’s Global Research and Consulting.
