Real Estate Watch: Inland Empire
Inland Empire Industrial Steams Ahead
Industrial Market
The Inland Empire added about 2.1 million square feet of industrial space in the fourth quarter, putting its year-end total at 262 million square feet.
The region had 5.9 million square feet of gross industrial activity in the quarter, with 24.3 million square feet of activity for the full year.
Strong demand led to 1.9 million square feet of positive net absorption for the quarter, and 12.4 million square feet on the year.
The western part of the region accounted for 82% of vacant space and a vacancy rate of 5.3%. The vacancy rate in Eastern Inland Empire stood at 2.8%. At 14.9%, the western market had the highest vacancy rate for buildings in the 70,000- to 79,000-square-foot range.
Ontario again posted the most sale and lease activity among cities, with 7 million square feet of activity, or 29% of the total.
Some notable build-to-suit deals included Maytag’s 455,455-square-foot building in Mira Loma, Kohl’s 651,000 square feet in San Bernardino and Stater Bros.’ 289,683 square feet in Redlands.
The average asking gross lease rate was 39 cents per square foot in the fourth quarter, with a range of 25 cents to 55 cents. Industrial buildings bigger than 100,000 square feet reported an average asking gross lease rate of 38 cents per square foot.
Office Market
The Inland Empire office market had 808,475 square feet of positive net absorption last year, down 7% from a year earlier.
There was 228,058 square feet of positive net absorption in the fourth quarter.
The office vacancy rate continued to decline amid the positive absorption, ending the year at 10.4%, down from 14.8% in the fourth quarter a year earlier.
There was 238,088 square feet of office space that came on the market last year, with 159,926 square feet still in the construction phase.
At $1.56 per square foot, the average asking gross lease rate for office space was up 11 cents vs. a year ago.
Analysis provided by CB Richard Ellis’ Global Research and Consulting.
