Inland Empire industrial real estate market report
Considered one of the most sought-after markets for industrial space, the Inland Empire has not lost any momentum as market fundamentals remain robust. Total vacancies continue to remain at its lowest levels and pushing rental rates to new all-time highs. Developers remain extremely active throughout the market in order to supplement demand with over 37.5 msf under construction. Bill AB2840 which would effectively ban most industrial developments within 1,000 feet from all non-industrial areas did not make it out of the Senate Governance and Finance Committee meeting on June 29th. Assembly Majority leader Eloise Gomez Reyes who authored the bill has stated that she is expecting to renew her efforts in 2023.
The Inland Empire industrial sector added over 5.3 msf of new construction in the second quarter, pushing total inventory of industrial and flex buildings of at least 50,000 sf and above to 550.5 msf. Currently 37.5 msf remain under construction.
With no indications of slowing down, strong occupier demand brought in over 5.4 msf of positive net absorption in the second quarter.
Average asking lease rates continue to post all-time highs, but it has become difficult to quote pricing as it is common for listings to remain unpriced. Currently, rental rates within core markets have continued to trend upwards, with rates at $1.60 psf triple-net.
Total available space increased nearly 6.6 msf from the quarter prior to 34.9 msf market wide.
Total vacancies remained stagnant at 1.2% for the second straight quarter. Currently, 5.1 msf of direct and 1.3 msf of sublease space remains vacant.
The Inland Empire industrial market continues to attract investors due to steady leasing and demand fundamentals with investment sales totaling over $958.7M in the second quarter.
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