Region shows no sign of slowing in the commercial real estate office sector
The Inland Empire’s office market was set at 11.3 percent vacancy last quarter and has consistently dropped every quarter over the past three years. The market has seen an influx in large and mid-level groups moving in as well as new entities expanding their ventures into the area. This is predicted to translate into steadily increasing momentum, higher rates, and a drop in vacancy for the foreseeable future.
The nature of the market dictates that the current high-momentum growth will eventually taper off, though that is not expected anytime soon, according to Matt Shaw, a sales associate at Coldwell Banker Commercial SC, who specializes in office sales and leasing.
CBC SC is currently functioning at roughly 20 percent above the market for rental rates with area demand getting stronger quarter by quarter. The area is also seeing concessions being pulled back and reduced by landlords.
“Vacancy rates are steadily dropping from the 30 percent we saw in 2010,” said Corey Martin, Executive Vice President at CBC SC. “This is attributed to an influx of users flooding into the Inland Empire due to the compression of local core markets such as Los Angeles and San Diego.”
On top of market compression, prices have skyrocketed, pushing numerous users into the Inland Empire, specifically into Southwest Riverside County where Martin specializes.
CBC SC currently has upwards of five corporate users in the Southwest Riverside County region alone who are occupying 10,000 square feet a piece or more. Along with such users, build-to-suit properties are also getting a lot more attention from larger entities.
With the market as strong as it is, Martin also predicts a sturdy real estate market in the years to come.
“I predict we have another four to five year run in the positive market. The financial and real estate markets will largely sit in the hands of the upcoming Presidential election, so it will be interesting to see where things go once we end up at that juncture,” he said.
Though the commercial real estate market has hundreds, if not thousands, of factors weighing in on a positive or negative trend, this region of the country can rest assured that for the time being, things are going to be relatively stable.
