Apex Real Estate Services · DRE #01422904 · CCIM-Led
Hemet, CA · (951) 977-3251
Vacancy, rents, absorption, construction, and cap rates for the Inland Empire’s 78.9 million SF office market, plus medical office and all 15 CoStar submarkets, from the Airport Area to Riverside and Temecula. Apex’s analysis of CoStar data, Q3 2026.
The Inland Empire office market report for Q3 2026 shows a tight market that is losing momentum: 4.7% vacancy, the lowest among the nation’s 50 largest office markets, a $2.57 per SF monthly market asking rent up 3.0% in a year, and only 207,361 SF under construction, nearly all of it medical office, according to Apex’s analysis of CoStar data.
Reviewed by Robert Mendieta Jr., CCIM (DRE #01422904), Associate Broker · Commercial Division, Apex Real Estate Services · Last updated: September 30, 2026
The Q3 2026 figures below cover CoStar’s full 78.9 million SF Inland Empire office market. Each is labeled with CoStar’s own measure, because an asking rent, a transaction cap rate, and a modeled market cap rate answer different questions.
| Measure | Q3 2026 | Context |
|---|---|---|
| Vacancy | 4.7% | Historical average 8.6%; down 0.1 point year over year |
| Availability | 5.9% | Sublease availability 0.3%, versus 1.6% nationally |
| Market asking rent | $2.57 / SF / mo | CoStar’s full-service average: about $31.00 / SF / yr |
| 12-mo asking rent growth | +3.0% | 10-year annual average 4.1%; CoStar’s 2026 forecast 2.1% |
| 12-mo net absorption | +105,753 SF | Third quarter 2026 alone: -30,342 SF |
| 12-mo deliveries | 58.1K SF | Mostly medical office |
| Under construction | 207,361 SF | 7 buildings · 91.4% pre-leased |
| 12-mo sales volume | $826.4M | 265 transactions; historical average $427.9M |
| Avg. transaction cap rate | 6.7% | Closed sales, trailing 12 months; range 4.4% to 7.8% |
| Market cap rate | 8.4% | CoStar’s modeled estimate for all office properties |
| Market sale price | $213 / SF | A record level, up 7.7% year over year; closed sales averaged $247 / SF |
Source: Apex’s analysis of CoStar data, Inland Empire Office Market and Office Capital Markets reports, Q3 2026 (dated September 30, 2026). Sales are trailing 12 months; the market cap rate and market sale price are CoStar estimates for all properties, while transaction figures average closed sales.
CoStar divides the market into 15 submarkets, and the Airport Area, San Bernardino, and Riverside together hold 47.7% of the inventory. Office demand tracks population, and CoStar places the market’s largest population centers in the southwest along Interstate 15 and Interstate 10. These are CoStar’s boundaries, not city limits: the Airport Area takes in Ontario, Rancho Cucamonga, Fontana, and nearby cities as CoStar defines it, South Riverside includes Temecula and Murrieta along the I-15 corridor, and a Jurupa Valley clinic sits in CoStar’s Riverside submarket.
| Submarket | Inventory (000 SF) | Vacancy | Asking Rent / SF / Mo | 12-Mo Rent Growth | 12-Mo Net Absorption (SF) |
|---|---|---|---|---|---|
| Airport Area | 13,925 | 5.9% | $2.90 | 4.2% | -9,783 |
| Beaumont/Hemet | 2,490 | 6.9% | $2.38 | 2.9% | -92,813 |
| Chino/Chino Hills | 1,808 | 2.7% | $2.95 | 4.2% | 29,823 |
| Coachella Valley | 8,584 | 5.4% | $2.56 | 2.4% | 37,546 |
| Corona/Eastvale | 4,703 | 5.4% | $2.64 | 2.3% | 42,796 |
| Mojave River Valley | 5,632 | 2.4% | $2.10 | 3.3% | 30,591 |
| Moreno Valley/Perris | 3,302 | 3.4% | $2.59 | 2.6% | 15,833 |
| Redlands/Loma Linda | 4,091 | 2.9% | $2.66 | 2.6% | -35,916 |
| Riverside | 11,591 | 5.9% | $2.61 | 2.6% | -110,175 |
| Riverside Outlying | 171 | 1.1% | $2.45 | 2.9% | 1,000 |
| San Bernardino | 12,127 | 4.1% | $2.29 | 2.6% | 57,894 |
| San Bernardino Outlying | 133 | 5.8% | $2.33 | 3.0% | 0 |
| South Riverside | 7,277 | 3.5% | $2.59 | 2.3% | 73,789 |
| Twentynine Palms | 611 | 3.5% | $2.49 | 2.7% | 13,616 |
| Upland/Montclair | 2,502 | 4.8% | $2.60 | 4.3% | 51,552 |
The spread matters more than the average. South Riverside led 12-month absorption at +73,789 SF and San Bernardino followed at +57,894 SF, while Riverside was weakest at -110,175 SF. Chino/Chino Hills carries the highest asking rent ($2.95) and Upland/Montclair the fastest rent growth (4.3%). Beaumont/Hemet — home to Apex’s office — has the highest vacancy of the 15 at 6.9%, up 3.7 points in a year; its 3 Star buildings sit at 13.1% vacancy while 1 & 2 Star space is at 2.7%.
Source: Apex’s analysis of CoStar data, Inland Empire Office Market report, Q3 2026 (submarket inventory, rent, vacancy, and absorption tables), and CoStar’s Beaumont/Hemet office submarket report, Q3 2026. Asking rents are CoStar market asking rents per SF per month.
Per CoStar, demand comes from small businesses, locally serving professional firms, healthcare providers, and government-related users. Deals are small — most leases signed since the beginning of 2020 were under 1,500 SF — and larger ones come mainly from public-service, medical, and education users; the largest new lease of the first half of 2026 was a charter school taking about 43,000 SF in Murrieta.
Momentum has faded. Net absorption turned slightly negative in the first quarter of 2026, the first quarterly contraction in eight quarters, recovered in the second, and slipped to -30,342 SF in the third. Trailing 12-month absorption of 105,753 SF compares with a historical annual average of 968,760 SF. The tenant mix is shifting, too: in CoStar’s leasing-by-industry data (new leases, 12 months ending Q2 2026), professional, scientific, and technical firms signed 22.2% of Inland Empire office leasing, up from 18.0%, edging past healthcare at 22.1%.
For tenants, the constraint is size. CoStar counts only slightly more than 20 properties offering at least 20,000 SF of contiguous space, and sublease availability is just 0.3%, so a large requirement needs an early start. Apex’s tenant representation runs that search on the tenant’s side, and the guide to leasing commercial property walks through the steps. For the build-out allowance itself, see our guide to tenant improvement allowance.
The $2.57 market asking rent is up 3.0% over 12 months, below the market’s 4.1% annual average of the past decade, and CoStar expects growth to stay subdued through 2026. Inland Empire rent growth has still outpaced the national average since 2016, narrowing the region’s discount to U.S. rents from about 36% before the pandemic to roughly 20%.
Building class splits the market. 4 & 5 Star space asks $2.96 per SF per month with 4.8% vacancy, a full-service average of $36.00 per SF a year, per CoStar; 3 Star, the largest class, asks $2.61 with 5.2% vacancy; and 1 & 2 Star is the tightest, at 4.0% vacancy and $2.43, with the fastest rent growth at 3.5%.
Compare quotes on the same basis. CoStar states its office averages on a full-service basis, while premier medical office leases for upwards of $36 per SF a year on a triple-net basis, the equivalent of more than $50 full-service. CoStar estimates annual operating expenses at $9.85 per SF for 4 & 5 Star buildings, $9.02 for 3 Star, and $9.43 for 1 & 2 Star — the load that separates a gross quote from a net one. Apex’s guides to gross vs. net leases, modified gross leases, triple net leases, and CAM charges show how to normalize them. For how office square footage is measured, see our guide to rentable vs. usable square feet.
Development outside medical office has been limited for more than a decade, per CoStar. Since the beginning of 2020, more than 30 medical office buildings totaling nearly 1 million SF have delivered, mostly built-to-suit or pre-leased, and they are now more than 80% leased. Nearly all of the space under construction in Q3 2026 is medical, led by the 67,497 SF RUHS Wellness Village in Perris, fully pre-leased and scheduled for October 2026.
The demand is structural: CoStar credits a sizable retiree population with supporting healthcare services and medical real estate. Healthcare and social assistance tenants signed 22.1% of new Inland Empire office leasing in the 12 months ending Q2 2026, nearly double the 11.3% U.S. share, though below the region’s own 10-year average of 30.2%. In South Riverside, a 58,000 SF building on the Makena Murrieta medical campus is fully leased, a second Makena building at 25420 Hancock Ave is fully pre-leased and nearing completion, and Kaiser Permanente’s 80,000 SF Murrieta building is the first phase of a planned 824,500 SF campus.
It is not a one-way bet. Medical office vacancy has held around 6% while traditional office vacancy fell below 4%, and CoStar warns that slowing population growth may limit further tightening as new medical supply keeps arriving. Medical leases do run longer and larger: 3.1 years and 2,400 SF on average, versus 2.8 years and 1,900 SF for traditional office.
On the sale side, medical buildings most commonly trade in the 7% cap-rate range, per CoStar. In August 2026, SAC Health System recapitalized Northpointe, a 280,000 SF medical office property in San Bernardino, for $95 million ($339/SF), the largest office sale of the past 12 months, and in March 2026 a La Quinta medical building leased to WelbeHealth PACE through 2043 sold at a 7.5% cap rate. Physician groups that own their buildings can weigh a sale-leaseback to unlock that equity.
Twelve-month sales volume reached $826.4 million across 265 transactions, nearly double CoStar’s long-run historical average of $427.9 million and well above the $578 million ten-year average. Private investors dominate: over the past three years they accounted for more than 70% of acquisition volume, users for 19%, and institutions and REITs just 10%, down from a 15% historical share.
Pricing is back at a record. CoStar’s market sale price is $213 per SF, up 7.7% year over year, and closed sales averaged $247 per SF. Recently traded properties have generally reflected cap rates near 7%, up from the low-5% range several years ago; the 12-month average transaction cap rate was 6.7%, while CoStar’s modeled market cap rate for all properties is 8.4%. Traditional non-medical buildings frequently trade well below replacement cost, which is why so little speculative office gets built.
Sellers should expect a private and owner-user buyer pool; buyers should underwrite each building on its own leases rather than the market average. Start with Apex’s cap rate guide, a free property valuation, or 1031 exchange advisory.
Riverside office market trends turned softer in 2026. CoStar’s Riverside submarket — 11,591,378 SF, the third-largest of the 15 — saw vacancy rise to 5.9% in Q3 2026, up 1.0 point year over year after a record low of 4.5% at the end of 2025, and its 12-month net absorption of -110,175 SF was the weakest in the region. CoStar traces much of the loss to the 35,680 SF Riverside Community Hospital Campus building at 4444 Magnolia Ave, listed for office and medical lease in the first quarter, and to second-quarter move-outs at 4210 Riverwalk Parkway and 2038 Iowa Ave.
| Riverside Class | Inventory (SF) | Vacancy | Asking Rent / SF / Mo |
|---|---|---|---|
| 4 & 5 Star | 2,063,426 | 4.6% | $3.01 |
| 3 Star | 4,864,382 | 7.9% | $2.62 |
| 1 & 2 Star | 4,663,570 | 4.2% | $2.43 |
Vacancy is concentrated in 3 Star buildings. The tenant base — small businesses and healthcare providers — is still leasing: San Bernardino County, Unitek College, and law firms signed deals above 20,000 SF in 2025, and Stanbridge University’s 27,000 SF lease in the Spruce Professional building led 2026. Asking rents rose 2.6% to $2.61 per SF per month, about $31.00 a year full-service, per CoStar.
Owner-users have been particularly active on the sale side, rising to roughly 30% of Riverside volume, about double their 15% share over the past decade. The Riverside Unified School District bought two Iowa Avenue buildings totaling 102,810 SF for $24.5 million for its district office, and the County of Riverside paid about $25 million ($625/SF) for the Jurupa Valley Care Clinic it already occupied. Twelve-month sales totaled $81 million at a market price of $234 per SF, and the only building under construction, 42,640 SF at 4440 Brockton Ave, is fully pre-leased.
What it means: landlords with 20,000 to 30,000 SF blocks should price for slower absorption, since CoStar notes a typical quarter hinges on one or two such move-ins; tenants have more options than at the 2025 low; and owner-users remain an unusually active buyer pool alongside private investors.
Source: Apex’s analysis of CoStar data, Riverside office submarket and capital markets reports and Inland Empire Office Capital Markets report, Q3 2026.
Tenants are physician groups, outpatient providers, and health systems, and buyers are mostly private investors seeking long NNN leases. Apex handles leasing, investment sales, and sale-leasebacks for medical buildings across the Inland Empire and Coachella Valley.
At 41,424,490 SF, 3 Star space is the backbone of the market, home to legal, accounting, insurance, and back-office users, with 5.2% vacancy and a $2.61 asking rent (CoStar, Q3 2026). Pricing and concessions decide lease-up here; see Apex’s landlord representation.
The class totals only 6,873,773 SF, with 4.8% vacancy, a $2.96 asking rent, and 124,602 SF under construction (CoStar, Q3 2026). Top-tier suites are scarce, so tenants who need one should start early.
This class totals 30,649,514 SF at 4.0% vacancy and $2.43, the tightest of the three, though CoStar forecasts it losing occupancy every year through 2030. Small buildings suit owner-users, who took 19% of acquisition volume over the past three years; test the math with Apex’s own-vs-lease calculator. Small suites are often quoted on other bases: Apex’s ±848 SF Palm Springs office condo is offered at $2.85/SF/mo Modified Gross, per its listing.
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Robert Mendieta Jr., CCIM (DRE #01422904) brings institutional-grade investment analysis — cap-rate math, absorption data, and lease-structure comparisons — to every office assignment.
Riverside and San Bernardino counties and the Coachella Valley, covered from one Hemet office with no hand-offs.
Acquisition, disposition, leasing, and landlord and tenant representation across office, medical office, retail, industrial, and land — backed by the quarterly research Apex publishes.
You work directly with the broker — Robert Mendieta Jr., CCIM — from first consultation through closing. Joseph Lombera, Commercial Agent + CMO (DRE #01971957), supports marketing and deal flow.
Inland Empire office vacancy was 4.7% in Q3 2026, per CoStar, the lowest among the nation’s 50 largest office markets, with availability at 5.9% and sublease availability at 0.3%. Vacancy varies by CoStar submarket, from 1.1% in the small Riverside Outlying submarket to 6.9% in Beaumont/Hemet. The trend has softened: net absorption was -30,342 SF in the third quarter, and the Riverside submarket gave back 110,175 SF over 12 months.
CoStar’s Q3 2026 market asking rent for Inland Empire office space is $2.57 per SF per month, up 3.0% in a year, or about $31.00 per SF annually on a full-service basis. 4 and 5 Star space asks $2.96 per SF per month, premier medical office leases for upwards of $36 per SF a year on a triple-net basis, and submarket asking rents run from $2.10 in Mojave River Valley to $2.95 in Chino/Chino Hills. Confirm whether a quote is full-service, modified gross, or NNN before comparing spaces.
Healthcare is an outsized share of demand. In CoStar’s leasing-by-industry data for the 12 months ending Q2 2026, healthcare and social assistance tenants signed 22.1% of new Inland Empire office leasing, down from 29.9% a year earlier but nearly double the 11.3% U.S. share. CoStar ties that to a sizable retiree population and reports that more than 30 medical office buildings delivered since 2020 are more than 80% leased. The caution: medical office vacancy has held near 6% while traditional office fell below 4%, and slowing population growth may cap further tightening.
In CoStar’s Riverside office submarket, vacancy rose to 5.9% in Q3 2026 from a record low of 4.5% at the end of 2025, and 12-month net absorption was -110,175 SF, the weakest of the Inland Empire’s 15 submarkets, driven largely by a hospital-campus building listed for lease and move-outs on Riverwalk Parkway and Iowa Avenue. Asking rents still rose 2.6% to $2.61 per SF per month, and owner-users such as the Riverside Unified School District remain active buyers.
Per CoStar’s Q3 2026 capital markets report, Inland Empire office sales averaged a 6.7% cap rate over the past 12 months, with reported rates from 4.4% to 7.8%, and recently traded properties have generally reflected cap rates near 7%, up from the low-5% range several years ago. Medical office buildings most commonly trade in the 7% range. CoStar’s modeled market cap rate for all office properties is 8.4%, and market pricing reached a record $213 per SF.
Start with a free consultation: call Robert Mendieta Jr., CCIM at (951) 977-3251, email robert@apex-res.com, or submit the form on this page. Apex will review your building or requirement, pull CoStar submarket data and lease or sale comparables, and deliver a broker opinion of value, a leasing strategy, or a site search, whether you own a medical building in Murrieta, a 3 Star office in Riverside, or need suite space near Ontario. Current availabilities are posted on Apex’s properties for lease and for sale pages.
Whether you own a medical building in Murrieta, a 3 Star office in Riverside, or need suite space near Ontario, start with a data-first conversation — CoStar submarket figures, lease and sale comparables, and a straight read on value. No call center, no hand-offs.
Apex Real Estate Services · 3750 E. Florida Ave Suite A, Hemet, CA 92544 · DRE #01422904
Apex Real Estate Services · Robert Mendieta Jr., CCIM, Associate Broker · Commercial Division, DRE #01422904 · 3750 E. Florida Ave Suite A, Hemet, CA 92544 · (951) 977-3251 · Joseph Lombera, Commercial Agent + CMO, DRE #01971957. Market data on this page is Apex’s analysis of CoStar data: the Inland Empire Office Market and Office Capital Markets reports and nine CoStar office submarket reports (Airport Area, Beaumont/Hemet, Coachella Valley, Mojave River Valley, Moreno Valley/Perris, Redlands/Loma Linda, Riverside, San Bernardino, South Riverside), Q3 2026, all dated September 30, 2026, plus CoStar’s U.S. Office Leasing by Tenant Industry Report, Q2 2026. The Palm Springs lease rate is from Apex’s listing page. Figures describe CoStar’s market or submarket definitions, not city limits, are subject to change, and should be independently verified. Information is deemed reliable but not guaranteed.
