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Thursday, Mar 28, 2024
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Inland Empire Commercial Activity Starts Off Year on Healthy Note

The Inland Empire industrial market at the close of the first quarter was consistent with continued development and steady tenant demand. It generated 5.8 million square feet of gross activity.

Prospective tenants’ property tours have begun to increase in the big-box building size after a slow start at the beginning of the year.

The market’s velocity, due to the shrinking supply of quality product, has shifted to smaller buildings, with an increase in activity in the smaller-than-100,000-square-feet range. No longer are the big boxes responsible for the majority of activity in the Inland Empire.

The Inland Empire recorded a 4% overall vacancy rate, unchanged from the fourth quarter and down from 5.6% year-over-year.

The overall asking lease rate dropped 1 cent to 38 cents per square feet compared to the fourth quarter.

Speculative development continued its pace with the continued demand and absorption of space. About 15.8 million square feet of industrial product was under construction in the Inland Empire at quarter’s end.

In addition, 2.9 million square feet of new inventory was delivered to the market. Approximately 4 million square feet of the under-construction product was already committed to tenants.

The overall performance of the Inland Empire office market was positive due to stable activity levels and modest absorption gains.

The market, with the fall in unemployment and activity levels improving, finished the quarter with 77,222 square feet of positive net absorption.

Transactions such as RBF Consultants signing an 11,000-square-foot lease in Ontario contributed to the absorption uptick.

Analysis provided by CBRE Research

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