The momentum of substantial Inland Empire industrial growth in 2014 carried over into 2015 as gross activity spiked in the first quarter, totaling 9.9 million square feet.
Increased activity and solid market fundamentals resulted in a continued landlord’s market where owners are optimistic and continue to push rates higher in the biggest buildings in the market.
The overall average asking lease rate at quarter’s end was 39 cents per square foot, unchanged from the prior quarter.
Inland Empire lease rates have remained flat, primarily due to certain size ranges underperforming, counteracting positive rent growth in other size segments. Buildings 250,000 square feet and larger are starting to experience peak rates, though, exceeding prerecession rates.
The overall vacancy rate in the Inland Empire finished the quarter at 4.1%, down 8.8% from the fourth quarter.
The industrial market generated 9.9 million square feet of gross activity during the first quarter.
The Inland Empire generated 4.1 million square feet of positive net absorption. The Inland Empire office market opened the year with good activity levels.
Inland Empire West continued to outperform the Inland Empire East submarket.
The Inland Empire continued its slight upward trajectory with activity from a variety of industries, though historically significant insurance and government tenants remained strong.
Market fundamentals returned mixed results, with rates holding constant and vacancy declining in 11 of the 13 submarkets CBRE tracks.
The average asking lease rate held at $1.76 per square foot. And the region’s office vacancy rate improved to 15.3% from 15.8%.
Analysis provided by CBRE Research
