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Market Report

Riverside-San Bernardino Office Market Report

2024 Investment Forecast

Metro Stands Out on a National Scale;
Market Dynamics Warrant Medical Office Investment

Record job counts in several office-reliant sectors reflects demand. Office vacancy in the Inland Empire hovered in the mid-8 to high-9 percent range over the past five years, with the metro’s rate at the onset of 2024 ranking as the lowest among major U.S. markets. While this would appear to warrant an increase in construction, developer activity is mild across the Inland Empire, with local stock slated to grow by just 0.2 percent this year. As most of this space is already accounted for, tenants seeking available floor plans will be directed to existing properties, aiding occupancy rates. The lack of supply additions should also assist renewal activity at buildings with upcoming lease expirations, particularly among government agencies and health services firms whose record job counts maintain near-term space requirements. Further contributing to what will be the smallest vacancy fluctuation among major West Coast markets this year is demand for office-industrial space. Of late, a notable number of lease executions have involved office spaces that are part of larger warehouse or manufacturing properties.
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