Riverside-San Bernardino Retail Market Report

Mild construction helps one of the nation’s most vacant markets gain traction. Riverside-San Bernardino enters 2023 on very solid ground historically speaking. Vacancy sits at 6.8 percent compared to a trailing 10-year mean of 8.4 percent, while the average asking rent is on pace to eclipse the $20.00 per square foot threshold for the first time since the global financial crisis. During both 2021 and 2022, net absorption surpassed 2 million square feet, which had only occurred twice across the prior decade. This robust demand dropped vacancy by 200 basis points in that two-year stretch, and the rate will remain on a downward trajectory in 2023. While leasing activity will struggle to match those recent periods amid economic headwinds, reduced construction should help prevent a rise in available space, as this year’s delivery volume is projected to be the smallest since 2011. Despite these positive strides, however, Riverside-San Bernardino’s retail sector remains one of the most vacant among major U.S. markets. Single-tenant availability was tied for the highest rate in the country, entering this year north of 6 percent, while multi-tenant vacancy above 8 percent ranked as the fifth largest.