Market Overview
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Rancho Cucamonga’s taxable retail sales continue to reach record levels in the city’s history with 2004 generating $1.75 billion. This continues a string of record highs that goes back to the middle 1980’s and includes those years when Southern California was in a severe recession (1991-1993). The 2004 growth was a record $335 million (23.7%). This surge came about with the fourth quarter opening of Victoria Gardens. The city’s long term retail trade increase, in part, has been a result of the rising number of families in the city and their growing incomes. It also reflects the successful opening and expansion of the destination retail centers along Foothill Boulevard. In addition, Rancho Cucamonga has benefited from direct sales to consumers by several of the contractors, manufacturers and distributors that are located in the community.

In the period from 2000-2004, Rancho Cucamonga’s taxable sales nearly went from $1.16 billion to $1.75 billion, a $585 million gain or 50.3%. Much of this gain represents a true increase in trade volume since prices rose only 12.9% in this period. Historically, the city’s retail growth has strengthened in year.

Rancho Cucamonga is the fourth largest office sub-market of the Inland Empire. The inland region’s market is a relatively small one with 20.3 million square feet in existence or under construction since office users have historically served the area from Los Angeles (184 million sq. ft.) and Orange (69 million sq. ft.) counties. Also, until recently the Inland Empire’s labor force did not have the large numbers of technical, professional or managerial workers to whom office operation need access as we do today. This has caused companies like mid-sized banks, law and accounting firms necessary to increase their presence in the region. Rancho Cucamonga has seen this in the growing size of PFF Bank & Trust’s branches and back office operation in the city. In fact, more than 25 office operations opened for business from 1994-2005, adding 3,585 workers.

In 2nd quarter of 2005, the office vacancy rate was just 7.4%. This was the second lowest vacancy rate among suburban U.S. markets behind Kern County (5.6%). This is why numerous office construction project have begun in the inland region. This includes Rancho Cucamonga where the 72,890 square feet of space is under construction and 270,808 square feet was completed in the last year.

A steady flow of manufacturing, distribution and high technology firms are being drawn to this area to take advantage of Southern California’s best combination of land availability and transportation infrastructure, plus labor and space costs. The area’s competitiveness is being enhanced by the increasing numbers of skilled technicians. Professionals and executive migrating to the upscale but reason priced executive neighborhoods being built in the city. Rancho Cucamonga is a prime beneficiary of this environment. The city is beautiful. It is transversed by the I-15 and new I-210 freeways. The community is unique among cities in the Inland Empire’s industrial “hot zone” west on the I-15 freeway in still having significant amounts of undeveloped industrial land. As a result, it will be increasingly a focal point for companies wishing to locate in this part of the inland region.

In 2004, companies located in Rancho Cucamonga paid $1.94 billion in payroll. The city’s emergence as a center for job growth is primarily the result of the out-migration of people and firms to the Inland Empire from the Southland’s coastal counties. This began when the density of land development in Orange, Los Angeles and San Diego counties created shortages of housing, manufacturing and distribution space in those areas driving up their space costs. As a result, people began flocking to the less expensive Inland Empire starting in the late 1970s. Firms began doing so in the mid-1980s. Today, the inland migration of skilled technicians, professionals and executives to high-end cities like Rancho Cucamonga is creating a labor pool that is able to support high technology firms, large professional organizations and regional corporate headquarters.

Firms migrating to Rancho Cucamonga find that labor is available and less expensive. Across over 500 common occupations, Inland Empire workers will accept 5.1% less pay than those in Orange and 4.2% less than in Los Angeles counties to offset the time and energy lost in long commutes. The skilled technicians, professionals and executives in this group (occupations earning over $55,000 a year in coastal counties) will accept 9.4% less compensation than in Orange County and 9.6% less than in Los Angeles County to work near their homes.

As a result of these advantages, from 1991-2004, CA Employment Development Department data show that Rancho Cucamonga’s employment more than doubled from 24,093 to 58,652. This was a gain of 34,559 jobs (2,658 per year) a rapid 7.1% annual rate. Looking at the city’s data, it is difficult to believe that Southern California lost over 500,000 jobs between 1991-1993 due to defense cutbacks after the Cold War or faced a slowdown in 2002. In both cases, Rancho Cucamonga was adding positions including growth of 10.5% in 2004.