Vacancy rate continues to climb, rents decline in I.E. office market

Grubb & Ellis has released its Office Market Snapshot for the second quarter.  The Inland Empire's office market vacancy rate increased in the second quarter to 23.5 percent, according to the report.  Annual Class A rents declined $1.16 to $26.34 per square foot in the past 12 months.  Class B rents declined $1.20 per square foot to $19.64 per square foot.  The office sector has shifted to a tenants' market in which prospective tenants are being offered incentives to renew or lease new space.  The positive absorption, at a rate of 23,387 square feet, indicates that tenants took notice of this during the second quarter, although they are committing to smaller spaces.  The desirability, coupled with competitive tenant incentives and amenities will make Riverside and Ontario more appealing to tenants as opposed to newer, more outlying submarkets, according to the report.  The total amount of vacant space increased by 50,000 square feet from the first quarter, bringing the total to 6.4 million square feet at the end of the second quarter, according to the report.