Black and White Office Building

Office Vacancy Rates Remain High in Riverside and San Bernardino Counties

Posted on December 9, 2012 ยท Posted in Market Analysis

High office vacancy rates continue to persist in Riverside and San Bernardino counties and as a result, tenants looking for space will continue to have their pick of available space at very competitive rates. This contrasts heavily with the Inland Empire’s industrial market which has seen the average asking rates jump 2 cents per square foot.

The Inland Empire continues to lead Southern California in overall vacancy rates by a wide margin. Orange County which current posts a vacancy rate of 16.6% is 4.5 percentage points lower than the 21.1% average found in Riverside/San Bernardino. With landlords unable to fill a fifth of their available space, we’ve found that we can negotiate rental rates that are on average 15% lower than the asking rate and this trend will continue as new properties set to be finished will only add more vacant space to the market.

Should You Act Now? Yes.

Office rents between Q3 2011 and Q3 2012 dropped 3.6 percent to an average of $1.85/square foot. Though there was a clear drop, rents decreased 6.3 percent for the same time period between 2010 and 2011 which indicates that the market has begun to tighten up.

Warehouse and Industrial Market Tighten Up

The vacancy rate for warehouse space fell to 4.9 percent from 6.6 percent in Q3 2011 and as a result asking rents improved from 33 to 35 cents per square foot. This indicates that the industrial market is now in a growth stage and will continue to improve throughout the next year as market conditions will undoubtedly mean additional asking rent increases.