The Inland Empire office market experienced positive developments in various aspects in the last year. At the close of 2023, CBRE reported there was a reduction in both vacancy and availability quarter-over-quarter, coupled with increases in net absorption and average asking lease rates. One property that may now test the market is the offer for sale of a 46,527 square foot Class A medical office building in the town of Upland for an asking price of $10.236 million, or approximately $220 per square foot. The commercial property known as Stewart Plaza is located on approximately 1.74 acres of land at 440 Mountain Ave.
The marketing of the property is led by the CBRE team of First Vice President Sammy Cemo and Vice Chairman Anthony Delorenzo. The property is currently owned by an entity affiliated with Stewart Plaza, LLC.
The Class B office building was originally constructed in 1987, but underwent renovations as recently as 2021. Furthermore, in the last two years, the property underwent extensive renovations including the replacement of the roof, modernization of the elevator, replacement of HVAC systems, upgrades to the lobby, installation of new lobby and exterior furniture, and the addition of a new digital directory. Finally, the building underwent an exterior paint job as late as November 2023.
The marketing materials show the commercial property is currently just over 60 percent leased with the weighted average lease term reported at 4.6 years. The current lease rates are shown as approximately 20 percent below the local area average $2.04 per square foot as of the last quarter of 2023. The current tenants include Edge Family Medicine, Inland Periodontics and a dental practice Robin Su DDS, among others.
Stewart Plaza is located on the corner of Mountain Avenue and West Arrow Highway, both main thoroughfares in Upland. The Upland location also gives the property further access to Los Angeles and Orange County to the West and the remainder of the Inland Empire region to the East, due to its proximity to US Interstate Highway 10.
CBRE’s Inland Empire Office Figures report for the last quarter of 2023 shows that the healthcare and legal sectors remained dominant in the submarket, emphasizing the importance of in-office presence. Move-in ready specialized suites facilitated quicker deal closures across different size ranges, addressing the urgent need for immediate office space.
When looking at the report in further detail, it showed numerous healthcare companies and law firms finalized lease agreements in the Inland Empire. Among them, Morning View Family Therapy committed to 4,954 square feet at 9065 Haven Ave in Rancho Cucamonga, and Community Health Association Inland Southern Region secured 2,364 square feet in San Bernardino. CBRE believes the trend of both legal and healthcare entities leasing space in the Inland Empire office market reflects a shared necessity to be physically present, either for collaborative learning or utilizing specialized equipment.
The Inland Empire office market’s appeal was further heightened by its relatively lower asking rates compared to nearby Orange County and Los Angeles. Despite economic challenges, CBRE believes the Inland Empire office market continues to thrive, benefiting from industries that value and prioritize in-person work.
