I.E. office vacancies rise in third quarter, Grubb & Ellis reports

Grubb and Ellis has released its third-quarter Office Market Snapshot for the Inland Empire. Key points:
* Office vacancies increased to 23.6 percent.
* Average asking rents for Class A space were down $0.03 to $2.17 per square foot, compared with a quarter earlier. Asking rents for Class B space decreased $0.01 to $1.63 per square foot compared with a quarter earlier.
* Approximately 74,000 square feet of sublease space was added to the market, bringing the year-to-date total to 489,331 square feet.

   The analysts concluded that the decline in construction deliveries and less space being put back on the market for lease indicate a stabilization of the vacancy rate.  However, declining vacancy and rising rental rates aren't likely to appear in the Inland Empire office market until job growth resumes in the white-collar sectors, according to the report.  On the investment side, the number of distressed properties is set to increase in the months ahead as payment becomes due on lingering notes, the report says.  Sale activity on foreclosed properties will increase in 2010, creating opportunities for investors and owner occupants, the report continues.  Full report: www.grubb-ellis.com/research