Activity in the Inland Empire industrial market steadily increased throughout 2010 and the momentum has carried over into this year.
The overall net absorption totaled 3.2 million square feet this quarter, a 37% increase from the first quarter of 2010.
The region saw 8.1 million square feet of gross activity in the first quarter, a year-over-year increase of 1.3 million square feet, or nearly 20%.
The pace got a push from 80 deals for leases and sales, up from 64 in the fourth quarter.
Most of the deals were leases, accounting for 7.3 million square feet of industrial space.
Santa Ana-based technology distributor Ingram Micro Inc. signed a lease for 562,089 square feet in Ontario.
A recent report from the Los Angeles County Economic Development Corporation found that “the recovery at the twin ports has had positive results for the Inland Empire’s transportation and wholesale trade sectors throughout 2010 and the area should continue to see more positive results in the coming months.”
Many of the leases and sales in the first quarter were for buildings 100,000 square feet or larger.
That contributed to the drop in both the availability and vacancy rates.
Overall availability decreased from 14.3% to 12.8%.
The Inland Empire West saw the biggest decline in availability, dropping from 13.1% in the fourth quarter to 11.5% in the first quarter.
The Inland Empire East submarket fell from 16.2% to 14.9%.
Vacancy rates also fell despite 4.6 million square feet of space coming to the market during the first quarter.
The overall vacancy rate dropped from 6.9% in the fourth quarter to 6.4%.
The Inland Empire West went from a vacancy rate of 5.6% in the fourth quarter to 5.2% in the first quarter.
The east submarket dropped from 8.9% to 8.3%.
The availability rate for buildings 500,000 square feet and larger fell to 5.6% from 7.8% in the fourth quarter.
The diminishing supply has some developers starting to buy land for speculative projects of 500,000 square feet or larger.
Ground recently broke on a 616,542 square-foot building in Redlands in the east submarket.
The region’s availability of abundant un-developed land remains a competitive ad- vantage and it likely will benefit the area as industrial development steadily makes a comeback.
The Inland Empire is continuing to experience a significant amount of investment capital seeking to purchase both leased and vacant buildings.
Analysis by CB Richard Ellis’ Global Research and Consulting.
The Real Estate Watch Chart
Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
