Inland Empire industrial real estate market reports
In 2020, ecommerce made up 18% of global retail sales. As e-commerce continues to drive the recovery, the industrial sector has been a bright spot during the pandemic with the Inland Empire at the heart of warehousing and distribution requirements for the SoCal region and the nation. Consumer demand is driving speed and a diverse inventory from e-commerce, and those expectations are unlikely to diminish as delivery conveniences have now become commonplace.
Inland Empire industrial market
- Industrial vacancy at 3.0 percent is at a 20-year record low as of Q2 2021
- Port volume traffic has increased 44.0 percent compared to the same period last year.
- Overall leasing activity has been sustained throughout the pandemic, currently sitting at 42.0 percent of the long-term annual average of the last 20 years of historical data.
- Net absorption is healthy and on pace to set an historic high. At 15.3 million square feet through the first half of the year, aggregate 2021 net absorption could outpace annual totals for the past decade.
Rental pricing trends
- Average asking rents for Inland Empire have increased by 4.3 percent since the start of the pandemic and have continued a steady upward trajectory since 2015.
- Rental rates in some areas never pulled back especially Inland Empire’s West. The Perris/Moreno Valley submarkets rents are up double digits since the pandemic.
- Inland Empire Industrial investment activity surged to $5.9 Billion since 2020 as investors are attracted to the sector fundamentals largely benefited from the COVID environment.
- Investors continue capital deployment on industrial assets at a rate that is 37.7 percent higher than the prior five-year average.
- Essential workers, a logistics hub and a sharp but entrenched rise in e-commerce spending have helped bring Inland Empire unemployment figures down to 7.2 percent. Other supply chain shocks throughout 2021 have done little to impede growth in leasing fundamentals, especially for Class A space.
- Local employment in Transportation, Warehousing & Utilities rose by 17.8 percent since February 2020, one of only three industry sectors, Construction and Federal Government were the other two, that grew during the pandemic.
- The Inland Empire area began to reopen in the second quarter, as vaccination rates slightly trail the national average to 36.9 percent.
- As office workers across the region begin to return to the office, the industrial workforce has grown by 4.7 percent since the beginning of the pandemic in February 2020.
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