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ONTARIO, CA-The Inland Empire office market has matured, according to Grubb & Ellis SVP John Ewart. He bases that assessment on the vacancy rate dropping more than a full percentage point to 9.3% in the third quarter, which is 2.6 points lower than it was a year ago.

Class A vacancy stands at 7%, according to Grubb & Ellis research, and asking lease rates are up 6.5% to $21.48 per sf.

“The Inland Empire has outgrown its identity as an emerging market and has secured its place as an established office market,” Ewart declares. “The two-county area has become attractive to a growing number of class A tenants, as well as a popular destination for both national and regional investors’ dollars.”

Ewart points to the results seen by Riverside-based Magnon Co., which shed four office properties in its hometown for $11 million, or $147 per sf. Three separate local investors grabbed the assets, allowing Magnon Co. to shift into new developments. The market already is seeing 547,862 sf of new construction, nearly triple the amount from a year ago. About 40% of that is the two-building office portion of Corona Pointe, a mixed-use project that includes retail space and a Marriott hotel.

However, 1.17 million sf of space has been absorbed in the San Bernardino/Riverside County area so far this year, according to Grubb & Ellis, double the amount during the same nine months in 2002. It also is the first time year-to-date absorption has topped one million sf since the firm began keeping its tally.

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