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Inland Empire Office Buildings Very Empty, USC Study Finds

According to the study, inland office buildings cannot fill one-fifth of their space, but industrial space is a hot commodity.

Riverside and San Bernardino counties continue to have the highest office vacancy rates in the Southern California region in the wake of the Great Recession, but industrial space in the Inland Empire remains in high demand, according to an annual survey released today.

According to the University of Southern California's Casden Industrial and Office Forecast 2012, inland office buildings cannot fill one-fifth of their space, putting a drag on rents.

The forecast showed that the 21.1 percent market-wide vacancy rate rivals rates in neighboring counties. Orange County, for example, had a 16.6 percent rate.

"A building boom has begun once again in the Inland Empire and could temper the improvements in rents and vacancy rates that otherwise would have occurred," said Tracey Seslen, the study's author. "The magnitude of the changes will also depend on manufacturing output, oil prices, U.S. monetary and fiscal policy, and sovereign risk in Europe."

Between the third quarter of 2011 and the third quarter of this year, the office market experienced a 3.6 percent drop in rents, for an average rent of $1.85 per square foot, according to the forecast. The decline, however, compared to a 6.3 percent slip from Q3 2010 to Q3 2011.

In the industrial market, space isn't widely available. The vacancy rate for warehouses and similar commercial structures fell 1.7 percentage points in the last year to 4.9 percent, according to the study.

That dovetailed with an increase in asking rents for inland-area industrial space, which goes for an average 35 cents per square foot, compared to 33 cents in 2011.

Research for the Casden Industrial and Office Forecast was provided by the Torrance-based Hoyt Organization.

tom December 06, 2012 at 04:48 AM
Why are they building new houses with so many old ones empty?
Galactic Cannibal December 06, 2012 at 05:00 AM
Tom: First : because they are stupid... Second: this is a capitalist-consumer driven system . Which is doomed to fail in the long term.
censored messenger December 06, 2012 at 06:05 AM
the Great Recession? Hah? This is a Depression. The last one didn't end until Dec. 8, 1941. A lot of government contracts and loans took place on that day. Prolonging our bankruptcy will only make it harder. Welcome the Fiscal Cliff! With city/state/county bankruptcies, all pension contracts will be voided and Police/Fire/Teachers can either voluntarily cut their wages or survive on IOU's. Bankruptcy is the key to destroying the death grip their unions have on our state. Again. we WANT bankruptcy..it's our best way out of this mess
JJ Mclure December 06, 2012 at 02:39 PM
illegals don't want office space
Bret D. Rijke December 06, 2012 at 02:52 PM
@ Galactic Cannibal You Wrote, “…this is a capitalist-consumer driven system. Which is doomed to fail in the long term.” As opposed to…? And do not confuse “corporatism” with capitalism. Huge differences. Corporatism is as corrupt as socialism or marxism.
Dave Peter December 06, 2012 at 03:06 PM
Yes Bret, we just witnessed all the corruption we need in our very own unregulated capitalistic system. I find it more corrupt than anything socialism or marxism calls for.
Galactic Cannibal December 06, 2012 at 03:41 PM
Hey Dude . Have you forgotten the original illegals off the Mayflower from England, and their followers . They did not take office space , they just took the land. Does HYPOCRISY trump INTEGRITY in your world. dude ????
censored messenger December 06, 2012 at 05:04 PM
Um. sorry to harsh your buzz, dude, Have you forgotten the so-called "Native Americans" and their followers came across the Bering Strait from Manchuria? Guess they were invaders too? They just took the land. Does IGNORANCE trump HISTORY in your world dude ????
JJ Mclure December 06, 2012 at 05:16 PM
the Mayflower people speak English and don't beat their wives
Galactic Cannibal December 06, 2012 at 06:13 PM
Dude, I forgot : Only the DB Cops rank number one in wife beating. But we must not talk about that must we dude. ? DB = donut belly
Galactic Cannibal December 06, 2012 at 06:21 PM
CM Dude if you rewind history you will find illegals throughout. Have you forgotten that our original ancestors came outa Africa and were black. But we used them as slaves in the good old USA. And consigned them to third class citizens. The illegals who came off the Mayflower and their followers initiated one of history's most cruel and violent periods. With the near absolute destruction of the then native Indians. An English kind of genocide, that Hitler would be pleased about.
Bob Hops December 06, 2012 at 06:26 PM
If you desire socialism then nobody is stopping you from leaving. Get the hell out of our country! We don't want it.
Galactic Cannibal December 06, 2012 at 07:49 PM
Dude what is your definition of Socialism ? Would you call our Social Security System here socialism . It is a Gov run program and is mandatory for all Americans. Just try taking it away from them....Dude. Do you drive a 200 mph Porsche designed and built in the powerful socialist country called Germany. Ever visited CERN in Europe , where the world's largest atom smasher is operated . Where socialist scientists are reaching back to the instant of the BIG BANG. Since you are anti -socialism, I assume you will never wish to purchase a BMW or a Mercedes or a Porsche. You will be OK with a Ford "Fiesta" Have a tranquil day dude...and fire up a big fat spliff to relax.
censored messenger December 06, 2012 at 07:54 PM
Think you've had WAY too many spliffs...your brain is mush.... we'll be reading about you next here....
JJ Mclure December 07, 2012 at 05:45 PM
this is why pot should not be legalized

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