Riverside-San Bernardino Office Investment Forecast
California's Tightest Market Lacks Development;
Medical Office Demand Widens Subsector's Buyer Pool
Growth of other commercial sectors a boon for vacant office stock. Riverside-San Bernardino's office sector enters 2022 with a vacancy rate more than 500 basis points below all other major California markets. Home to a comparably smaller inventory of space than these locales, the metro recorded positive Class B/C absorption in each quarter last year, a testament to existing demand for smaller and midsize footprints at regionally discounted rents. As the Inland Empire's industrial sector continues its rapid expansion this year, available offices are poised to attract companies that have historically used portions of warehouses for administrative operations. Additionally, a recently strong rate of household formation driven by metro-to-metro migration from Los Angeles County is elevating demand prospects for health services. In response, a percentage of medical office tenants may seek additional space this year. These organizations and traditional office-using firms will exclusively comb through the metro's existing stock for accommodating options as the region lacks speculative deliveries in 2022.