Inland Empire industrial real estate market report

Q2 2023

The Inland Empire experienced negative net absorption for the first time in over a decade as occupiers returned excess space garnered during the pandemic. Net absorption didn’t exceed new supply for the sixth straight quarter. However, expect annual net absorption to be positive by Q4 as several large pre-leased projects are set to deliver by the end of 2023.
31.4 msf


There is currently 31.4 million square feet of industrial product under construction, which is up from the previous quarter. In total, there is 570.7 million square feet of industrial product in the Inland Empire market.
-3.6 msf

Net absorption

During 2Q 2023, the Inland Empire industrial market saw 3.6 million square feet of negative absorption—the quarter with the highest rate of negative absorption in nearly a decade.

Cap rates

Capitalization rates have continued to increase in the Inland Empire. Q2 of 2023 saw cap rates for industrial space at 5.1% on average, compared with 2021’s rate of 3.9%. This increase has been influenced by the recent increase in interest rates.


Currently, there are 8.5 million square feet of industrial space available for sublet in Los Angeles, representing 8.7% of the availabilities in the market. This is nearly doubled from the previous year.


Total vacancy this quarter registered at 3.6%, with 2.9% being direct and 0.7% being sublet. This is nearly a percentage point up from the previous quarter, when total vacancy was 2.7%.
$248.82 psf

Investment sales

Investment sales continue to decrease, with sale price registering at $248.82 psf, and sale volume registering at $2.07B.

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