Inland Empire industrial real estate market report

Q4 2022

Although vacancies may have increased in Q4 2022, vacancies still remain at historically low levels. New developments entering the market, which can increase overall vacancy levels, have typically become leased within 3-6 months after completion. This trend will continue to keep vacancies at low levels. Considered a logistical gateway, development in the Inland Empire will remain extremely active as demand for newer state-of-the-art logistic facilities have never been higher. Nearly 50% of developments underway are pre-leased. With the possibility of additional interest rate hikes in 2023, we can anticipate cap rates to remain elevated between 4.5%-5.0% for the foreseeable future.
38.9 msf


At the end of 2022 there was 38.9 msf of new industrial construction underway. This is up 37.1% when compared to the end of 2021 when 28.4 msf was under construction.
13.9 msf

Net absorption

There was 13.9 msf of positive absorption in 2022, down 53.5% when compared to 2021’s total of 29.9 msf of positive absorption, this represents 2.5% of the total inventory.

Cap rates

Capitalization rates have begun to increase in the Inland Empire. At the end of 2022, the cap rates for industrial space were 4.5% on average, compared to 2021’s rate of 3.9%. This increase has been influenced by the recent increase in interest rates.


The availability rate for the Inland Empire industrial market came in at 6.8% in 4Q 2022, which is almost double the amount of space available at the end of 2021, when the availability rate was 3.7%.


Total vacancy this quarter registered 2.1%, 1.8% was direct and 0.3% was sublet. Sublet space has increased from 810,025 square feet at the end of 2021 to 1,410,798 square feet at the end of 2022.

Investment sales

Investment sales volume decreased by 12.7% when compared to 2021. Total sales volume in 2021 was $4.42 billion dollars and 2022 came in at $3.86 billion. We also witnessed the price per square foot increase by 55.0%.

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