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Market Report

Riverside-San Bernardino Office Market Report

4Q 2023

Inland Empire Continues to Exhibit Stability
Amid Regional Fluctuation in Office Demand

Conditions historically tight across property tiers. The Inland Empire’s office sector continues to stand out on a national and regional scale. The metro entered July with the lowest vacancy, 9.2 percent, among major U.S. markets, after its rate adjusted just 10 basis points over the past 12 months. This performance contrasts that of its three Southern California counterparts, each of which noted a vacancy spike of at least 120 basis points over the same period. Moving forward, the Inland Empire’s scant pipeline of traditional office projects and its relatively small stock of Class A space should keep the metro insulated from a potential decline in upper-tier demand. In the Class B/C sector, plateauing asking rents will aid renewal activity among cost-conscious tenants. Together, these factors should allow Class A and Class B/C vacancy rates to remain roughly 500 basis points below their long-term averages over the near term.
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