Industrial Market
The Inland Empire saw 4.3 million square feet of industrial space completed in the second quarter, with 18.4 million square feet of space under construction.
Transaction activity for the quarter was more than 6.5 million square feet. Slightly more than 70% of the activity was for new leases.
Vacancy for the second quarter varied little from the previous quarter, with a slight increase from 3% to 3.2%.
Average asking net lease rates also remained relatively stable, with a slight decrease from 42 cents per square foot to 41 cents per square foot.
Sale prices in the Inland Empire recorded a more dramatic increase, up from $92.38 per square foot in the first quarter to $98.69 per square foot in the most recent quarter.
At the end of May, the unemployment rate in the Inland Empire was 4.3%, down 0.3 percentage points from a year ago.
The area’s unemployment rate is lower than the national rate of 4.4% and California’s rate of 4.6%.
The Inland Empire’s industrial sector added 2,700 jobs in the second quarter, according to the California Employment Development Department. The manufacturing sector added 1,800 jobs.
Industrial employment accounts for 19% of total non-farm employment in the Inland Empire.
Office Market
The Commerce Department has predicted that the Inland Empire, which lies next to Orange, Los Angeles and San Diego counties, is set to outperform the growth rate of other areas in the nation.
And the California Department of Finance has predicted that the Inland Empire will be the fastest-growing urban area of California in the next decade.
Office construction remains steady, which has kept net absorption positive and demand strong.
Total office employment in the Inland Empire area increased by about 1,800 jobs during the past year. Office employment accounts for about 14% of the Inland Empire’s total non-farm employment.
There was 151,967 square feet of positive net absorption in the Inland Empire area in the second quarter.
Vacant office space in the Inland Empire increased slightly from 7.7% in the first quarter to 9.1% in the second quarter. This is partially due to the completion of 22 office buildings with a combined vacancy rate of about 64%.
The average asking gross lease rate for office space increased 5 cents to $1.85 per square foot in the second quarter, versus the prior period.
The completed construction added 475,778 square feet of office space to the Inland Empire market.
There is 1.3 million square feet of office space under construction, with an additional 4.1 million square feet planned during the next two years.
Analysis provided by CB Richard Ellis Group Inc.’s Global Research and Consulting.
The Real Estate Watch Chart – Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
CLICK HERE
to download
REAL ESTATE WATCH CHARTS
Please note: to download the file, you will need Adobe Acrobat Reader installed on your computer. For a free copy of the software,
click here.
