Murrieta Office Space
Statistics by John Husing Ph.D
Murrieta and Office Real Estate
Murrieta is part of an Inland Empire office real estate market that is finally showing significant vitality. In the 1990’s and again in 2001, net space absorption fell below zero, as more firms gave up space than leased it. Since 2002, the market’s net absorption has been positive. It reached an annualized rate of 1.2 million square feet in 2004, slowed in 2005 due to lack of space, and accelerated to record levels near 2.0 million square feet in 2005-2006. This is occurring because the Inland Empire now has a population of 4.0 million and 1.2 million jobs. It is thus difficult for office operations to compete for business from their coastal locations. The sudden surge in absorption has forced the area’s vacancy rate down to 7.0%, second lowest in the U.S. behind Washington , D.C. Firms wanting space are thus having trouble finding it.
In March 2006, Murrieta had 372,555 square feet of office space completed or under construction. The represented 1.7% of the Inland Empire ’s total of 22.4 million square feet. Again, firms can find space in Murrieta. In March 2006, the city had 86,657 square feet of industrial space either vacant (36,657 square feet) or under construction (50,000 square feet), 8th most of the 14 inland sub-markets. The space in these two categories represented 22.0% of the city’s total, the 2and highest rate in the Inland Empire . This included 194,427 square feet of completed Class A office space with 20,853 available yielding a vacancy rate of 10.7%. New space under construction will add 50,000 square feet to this total. It also included 141,471 square feet of completed Class B office space with 15,804 square feet available and a vacancy rate of 11.2%. In 2005, developers took out permits for $3.1 million of office development representing 2.1% of Riverside County ’s office permit valuation.Southwest Riverside County ’s office lease rates are relatively high. According to CB Richard Ellis, the average asking lease rate was $1.91 per square foot a month in March 2006. This was less expensive than the San Marcos area of San Diego County ($2.05 sq. ft./mo.) and more expensive than Vista ($1.84 sq. ft./mo.) and Escondido ($1.63 sq. ft./mo.). This a positive fact, since if the space can be leased, developers will be encouraged to build more. In the Inland Empire, the Southwest Riverside County office market’s average lease rate is less than downtown Riverside ($2.16 sq. ft./mo.), Corona ($2.08 sq. ft./mo.), Ontario ($1.99 sq. ft./mo.) and Riverside ’s Hunter Park ($1.97 sq. ft./mo.). It is more than Chino ($1.85 sq. ft./mo.) or the Inland Empire average ($1.80 sq. ft./mo.).
Murrieta’s office space along the I-215 freeway will likely be successful as it becomes part of the market being created by the Meridian Project near to March ARB. This will occur because the city of Riverside is running short of developable office property, a fact that will push office firms wanting to be in the county into the I-215 south corridor. This migration will be encouraged when the new Metrolink line to Perris opens in 2007.