Inland Empire industrial market report

 Sublease space declined to 16.7M SF, while total availability held at 13.7%. Recent 1M+ SF deals, including Medline’s lease, point to improving big-box tenant sentiment, though longer decision timelines continue to temper the pace of recovery. As large users re-enter the market, downstream absorption in mid to smaller-bay space should support a broader, gradual recovery.

Inland Empire industrial rents have corrected 35.7% from the 2023 peak to $1.01/SF, reflecting softer demand and increased tenant leverage. While concessions remain prevalent, particularly for larger spaces that have sat on the market longer, the pace of rent declines has begun to slow, suggesting the market may be nearing a floor.

Inland Empire industrial investment activity moderated in Q1, with 48 transactions totaling $553.9M, anchored by Walmart’s owner-user acquisition in Riverside. The slowdown reflects normalization following year end deal velocity rather than a demand reset. Capital markets are showing early signs of thawing, as stabilizing interest rates, moderating inflation, and improved debt liquidity drive better buyer-seller alignment.