Industrial Market
The Inland Empire unemployment rate fell to 5% in the fourth quarter, with 28,500 jobs added.
Although the industrial sector lost 600 new jobs, the Inland Empire’s unemployment rate fell by 13.8% from last quarter.
The industrial vacancy rate fell to 2.2%, down from last quarter’s 2.4%. The Inland Empire’s west submarket saw vacancy decline to 2.1% in the fourth quarter, while the east’s vacancy rate increased to 2.6%. The overall availability rate decreased to 7.3%.
The area posted more than 9 million square feet of gross activity during the fourth quarter. Chino led the Inland Empire with more than 2.5 million square feet of sale and lease activity. Strong demand for industrial space resulted in 6.1 million square feet of positive net absorption for the quarter, leaving the year-to-date net absorption at a positive 18.4 million square feet.
Average asking manufacturing and warehouse gross lease rates remained unchanged at 35 cents per square foot in the quarter. Lease rates ranged from a low of 34 cents per square foot to a high of 44 cents.
Sixty-one buildings and 5.9 million square feet completed development during the fourth quarter. Some 189 developments totaling more than 13 million square feet are in the construction phase.
Office Market
Inland Empire’s office sector added about 1,800 jobs in the fourth quarter, up 1.1% compared to the last quarter. The jobs total is 29.9% higher than five years ago.
The Inland Empire office market posted a decrease in vacancy rates to 10.9% in the fourth quarter, down 1.5% from the prior quarter. Class A office space once again reported the highest vacancy rate at 13.6%.
The Inland Empire recorded 304,396 square feet of positive net absorption in the fourth quarter, bringing the year-to-date total to about 633,500 square feet for the office market.
The Inland Empire east submarket posted positive 196,165 square feet of net absorption, while the Inland Empire west region had 108,231 square feet of positive net absorption.
The average asking full service gross lease rate for the Inland Empire office market increased 0.6% to $1.69 per square foot. Lease rates in the east submarket was $1.66 per square foot, with a rate of $1.84 in the west.
Rent for class A office space was $1.79 per square foot, with class C going for $1.36 per square foot.
Seven yoffice buildings totaling almost 309,000 square feet completed construction in the fourth quarter. There is 1.1 million square feet of office space under construction.
Analysis provided by CB Richard Ellis Group Inc.’s Global Research and Consulting.
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