Inland Empire Office Figures Q4 2024

MARKET OVERVIEW

• The IE office market completed 2024 with another positive quarter from several indicators. Quarter-over-quarter, the vacancy rate decreased 0.1% from 8.0% in Q3 2024 to 7.9% in Q4 2024. Asking rates remained steady at $2.06 FSG per sq. ft. despite positive net absorption.
• Strong market fundamentals in the IE attracted credit tenants in engineering, insurance, government, and family service industries, with continued demand from healthcare and legal tenants.
• Tenant Improvement (TI) costs remain inflated as owners recognize importance of custom spaces to bring tenant’s employees back into the office.
• Investment sales activity decreased quarter-over-quarter from two sold in Q3 2024 to one sold in Q4 2024. A lack of distress in the market has led to no distressed or lender facilitated sales.
• Net absorption was positive for the sixth straight quarter with 17,811 sq. ft. of net absorption. In 2024, there was a total of 195,451 sq. ft. of positive net absorption representing positivity in the market overall.
• Inland Empire office continued to hold one of the strongest office markets in the country with a diverse mix of tenants, low vacancy rates, and positive net absorption for the past six quarters bookending a strong market performance in 2024.