Apex Real Estate Services · DRE #01422904 · CCIM-Led
Hemet, CA · (951) 977-3251
Temecula commercial real estate is tight in 2026, especially for office and retail. In CoStar’s South Riverside submarket, which includes Temecula, office vacancy is 3.5%, retail vacancy is 3.9% and industrial vacancy is 5.4%. This guide covers Temecula, CA with Q3 2026 CoStar data, recent local sales, the largest employers and the freeway projects that shape the market.
Commercial real estate in Temecula, CA is tight in 2026. CoStar’s South Riverside submarket shows 3.5% office vacancy, 3.9% retail vacancy and 5.4% industrial vacancy as of Q3 2026. Office rents have returned to their 2007 peak, and industrial asking rents run roughly 20% above the metro average.
One caution: a CoStar submarket is not a city boundary. CoStar’s South Riverside submarket includes Temecula, Lake Elsinore, Murrieta and Menifee, so every vacancy, rent and cap-rate figure here describes that submarket, not the City of Temecula alone.
Office and retail are the tightest property types in the submarket, while industrial holds the most inventory and most of the construction pipeline, largely in Menifee rather than Temecula. Retail figures come from the submarket tables in CoStar’s Inland Empire retail reports.
| Metric | Industrial | Office | Retail |
|---|---|---|---|
| Inventory | ~24.6M SF | ~7.28M SF | ~22.7M SF |
| Vacancy | 5.4% | 3.5% | 3.9% |
| Market asking rent | $1.28/SF · +0.3% YoY | $2.59/SF · +2.3% YoY | $2.67/SF · +3.9% YoY |
| 12-mo net absorption | +358,000 SF | +74,000 SF | +213,213 SF |
| Under construction | 3,057,152 SF (mostly Menifee) | 32,292 SF | 199,000 SF · 97.4% pre-leased |
| Sales, past 12 months | $238.3M · 45 sales · 5.7% cap · $252/SF | $125.5M · 38 sales · 8.4% cap · $234/SF | $200.9M · 53 sales · 6.4% cap · $327/SF |
Regional detail: the Inland Empire industrial market report, the Inland Empire office market and the Inland Empire retail market report.
Because the local stock leans toward smaller manufacturing buildings, which typically command higher rents than large distribution facilities. CoStar says South Riverside asking rents remain roughly 20% above the metro average, supported by those buildings and by nearby affluent households.
Temecula industrial real estate sits inside a CoStar submarket of about 24.6 million SF with 5.4% vacancy and a market asking rent of $1.28 per SF per month. Over 12 months the submarket absorbed 358,000 SF while 63,700 SF delivered, and rent growth slowed to 0.3%. Flex space carries the highest asking rent, $1.60, and Specialized Industrial the lowest vacancy, 4.2%. Construction has historically centered on buildings under 100,000 SF serving local businesses, manufacturers and last-mile distributors.
MS Mountain View Park shows the pricing. The second phase of this Avenida Alvarado project delivered 19 buildings, most under 40,000 SF, with asking rents of $14.40 to $18.60 per SF per year on a triple-net (NNN) lease basis. Buildings in the park also trade: Building 3 sold for $4.2 million in April 2026 and Building 5 for $6.4 million in July 2026, both at $267 per SF. Source: CoStar, Q3 2026.
For context, CoStar says Inland Empire asking rents fell nearly 25% from their peak before recent gains narrowed the decline to about 20%, and some owners have accepted effective rents at least 30% below recent peak levels. Compare submarkets in our guide to Inland Empire warehouse availability. Negotiating a warehouse lease? See how a warehouse broker works for tenants.
Recent Temecula industrial sales priced between $111 and $267 per SF, and the office sales in the table below between $148 and $191 per SF, apart from one building at $763 per SF. Where CoStar reports a cap rate, these trades ran from about 5.8% to 7.5%.
CoStar says South Riverside industrial investment concentrates in properties under $10 million, mostly bought by private individuals and firms, with cap rates now in the high-5% to 6% range. Office buyers are mostly local investors, and medical office trades most often.
| Property | Type | Price | Date & Notes |
|---|---|---|---|
| 41980 Winchester Rd | Industrial · 275,243 SF | $37.5M · $136/SF | Jun 2026 · 6.5% cap |
| 41995 Zevo Dr | Industrial · 227,000 SF | $25.3M · $111/SF | Dec 2025 · about 5.8% cap (pro forma) |
| Highlands Business Center, 40880 County Center Dr | Industrial | $7.7M · $186/SF | Jun 2026 · 7.4% cap (pro forma) |
| Premier Business Park, 42210 Zevo Dr | Industrial | $6.3M · $257/SF | Sep 2026 |
| Winchester Plaza Office Building, 41593 Winchester Rd | Office | $8.4M · $191/SF | Dec 2025 · 83% leased |
| Old Town Corporate Center, 1–3 Better World Cir | Office · 3 bldgs | $11.3M total · $148 to $167/SF | Oct 2025 · 7.5% cap |
| 41540 Winchester Rd | Office | $5.2M · $763/SF | Jul 2026 · 100% leased |
These are closed sales, not listings. If you are weighing commercial property for sale in Temecula, test the asking price against comps like these; see how to calculate cap rate, or request a commercial property valuation built from comps and income.
Because little new space has been built and move-in-ready suites are scarce. CoStar puts South Riverside office vacancy at 3.5% and says limited move-in-ready space has constrained leasing, with 74,000 SF of net absorption over the past year.
Demand comes mainly from locally oriented businesses and government agencies, and population growth supports medical office expansion. Recent deliveries have been limited and concentrated in medical office, with 32,292 SF under construction. Average asking rents are $31.00 per SF annually, up 2.3% year over year and back at their 2007 peak. Class matters: 4 & 5 Star space is 3.2% vacant at $2.99 per SF monthly, while 3 Star, the bulk of the stock, is 4.3% vacant at $2.59.
Abbott owns 520,000 SF of office in the submarket and the City of Temecula owns 147,742 SF, per CoStar’s ownership table. Office trades averaged $220 per SF and generally closed at cap rates of 5% to 7%; CoStar’s $125.5 million 12-month volume includes a $50.1 million Murrieta sale.
For a firm searching Temecula office space, tight vacancy means fewer choices and less time to decide. Start early and negotiate through tenant representation.
Temecula’s retail centers on its regional shopping mall, Old Town district and auto mall, which the City says draw shoppers from across the Temecula Valley. In CoStar’s South Riverside submarket, retail vacancy is 3.9% and asking rent rose 3.9% over 12 months.
The submarket holds 1,656 retail buildings, and 12-month net absorption was 213,213 SF. CoStar says South Riverside keeps retail availability below 5%, a strength it ties to residential growth. One of the larger recent leases was 35,150 SF at the Commons at Temecula in Q4 2025.
City data explain the demand. Taxable sales in Temecula totaled about $4.72 billion in 2024, including about $1.23 billion at auto dealers and supplies and $538 million at eating and drinking places. The City’s Quality of Life Master Plan ranks Temecula in the top 13% of sales tax generators in the state and credits tourism with sales exceeding $1.1 billion a year, anchored by Pechanga Resort Casino, Old Town and more than 45 wineries.
Investors traded $200.9 million of South Riverside retail across 53 sales over 12 months, at a 6.4% market cap rate. For tenants seeking retail space in Temecula, the best spaces rarely sit long.
The school district, Abbott Laboratories and Temecula Valley Hospital, each with more than 1,300 employees as of June 2025, per the City’s fiscal 2024-25 Annual Comprehensive Financial Report.
| Employer | Employees |
|---|---|
| Temecula Valley Unified School District | 3,238 |
| Abbott Laboratories | 1,793 |
| Temecula Valley Hospital | 1,344 |
| FFF Enterprises | 700 |
| Milgard Windows & Doors | 530 |
| Walmart | 510 |
EDD figures cited in the City’s ACFR show 54,400 jobs in Temecula, up 0.2% from March 2024, and a 5.0% unemployment rate in August 2025. The Quality of Life Master Plan says the biomedical cluster employs thousands in healthcare and medical-device manufacturing.
A 2026 economic report published by the City, based on Census ACS 2024 data, found 54.4% of employed residents work in another city, down 12.1 points over five years and below the 67.6% county figure, a sign of Temecula becoming more of a jobs center.
Steadily. Temecula had 113,618 residents on January 1, 2026, up 0.85% in a year, and 39,325 housing units, up 1.7%, per the California Department of Finance. The City’s 2026 economic report puts median household income at $120,768 (ACS 2024, no margins of error), above Riverside County’s $93,172.
The Quality of Life Master Plan lists objectives to continue Uptown Temecula for Jefferson Avenue area revitalization, attract luxury hotels and a convention center, and support Old Town’s revitalization while protecting its historic appeal. Owners near Jefferson Avenue or Old Town should track those plans before a purchase or long lease.
Interstate 15 is the spine. The City says Temecula sits off I-15 about one hour north of San Diego, and the Riverside County Transportation Commission (RCTC) calls the I-15/215 junction a vital lifeline for Temecula and Murrieta residents.
On June 16, 2025, partners celebrated completion of Phase 2 of the French Valley Parkway project, which eases a northbound I-15 bottleneck between Winchester Road and the I-15/215 junction with dedicated on-ramps and a bridge for direct access to I-215. RCTC allocated $47 million in state STIP funding to it. Phase 3, planned with no start date, would build French Valley Parkway to full width between Jefferson Avenue and Ynez Road, including a bridge over I-15.
French Valley Airport, the county-owned general aviation airport just north of Temecula, handled about 120,000 operations in 2024 on a 6,000-foot runway; on May 20, 2025, the Board of Supervisors approved an air traffic control tower there.
Apex advises tenants, owners and investors across the Inland Empire, including southwest Riverside County, from its Hemet office. Apex does not have a Temecula office.
Engagements are led by Robert Mendieta Jr., CCIM, Associate Broker, Commercial Division, who brings more than 20 years of commercial real estate experience. For comparison, see our guide to Riverside commercial real estate. You can also compare Rancho Cucamonga commercial real estate.
Tight. In CoStar’s South Riverside submarket, which includes Temecula, Q3 2026 vacancy is 3.5% for office, 3.9% for retail and 5.4% for industrial. Office asking rents are back at their 2007 peak.
CoStar reports 3.5% office vacancy in its South Riverside submarket as of Q3 2026, with asking rents of $31.00 per SF a year. The submarket also includes Lake Elsinore, Murrieta and Menifee.
CoStar’s Q3 2026 market asking rent for South Riverside industrial is $1.28 per SF per month. At MS Mountain View Park, new small buildings were offered at $14.40 to $18.60 per SF per year, triple-net. Actual rates vary by building.
CoStar says South Riverside industrial cap rates are in the high-5% to 6% range; 41980 Winchester Road sold at 6.5% in June 2026. Office trades generally closed at 5% to 7%.
Recent Temecula industrial sales ranged from $111 to $267 per SF. CoStar’s market sale prices for South Riverside are $252 per SF for industrial, $234 for office and $327 for retail.
As of June 2025: Temecula Valley Unified School District (3,238 employees), Abbott Laboratories (1,793) and Temecula Valley Hospital (1,344), per the City of Temecula’s fiscal 2024-25 ACFR.
No. Apex’s office is at 3750 E. Florida Ave Suite A, Hemet, CA 92544, and Apex advises clients across the Inland Empire, including southwest Riverside County. Call Robert Mendieta Jr., CCIM, at (951) 977-3251.
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Apex Real Estate Services · Robert Mendieta Jr., CCIM · Associate Broker · Commercial Division · DRE #01422904 · Joseph Lombera · Commercial Agent + CMO · DRE #01971957 · 3750 E. Florida Ave Suite A, Hemet, CA 92544 · (951) 977-3251. Last updated: October 14, 2026. Figures describe CoStar submarkets, not city limits. Apex is not a law, tax or accounting firm; nothing here is legal, tax or investment advice. Information deemed reliable but not guaranteed.
