ONTARIO, CA-The Inland Empire office market has been one of the top performers in the US for years, but it got off to a slow start this year, according to new reports on first-quarter trends. The financial markets take much of the blame.

Grubb & Ellis Co. headlines its report on the region: “Inland Empire Office Market Off to Slow Start,” pointing to increased vacancy, lower absorption and an increase in sublease space in the first quarter. The Inland Empire region, which includes all of Riverside and San Bernardino counties, totals about 24 million sf of office inventory. That makes it relatively small compared with major US markets, but the region has caught the eye of developers and investors nationally in recent years because it has performed so well statistically, posting low vacancy, significant rent growth and little sublease space.

In the first quarter, however, the vacancy rate for Inland Empire office climbed to 14.6%, up from 11.9% the previous quarter and 7.3% a year ago, according to the Grubb & Ellis report. The CB Richard Ellis figures are pretty close to those of Grubb & Ellis, citing an increase from 11.85% vacancy in fourth quarter 2007 to 13.78% in first quarter 2008.

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