Inland Empire industrial market report
Q4 2024
The Inland Empire’s industrial market cooled in Q4 2024, with leasing activity dropping to 77 deals totaling 7.1 million square feet, a 48.9% decline from the prior quarter. Despite this, 2024 was the strongest leasing year since the pandemic, driven by Asian 3PLs and Amazon’s expansion efforts. Lease rates fell to $1.15/SF, down 26.7% from their 2023 peak. The construction pipeline remains limited, with 2.2 million square feet completed in Q4 and 12.2 million square feet under construction. Investor caution, concerns about overbuilding, and stricter regulations under Assembly Bill 98 are complicating new developments, signaling a slowdown in the region’s growth trajectory.
Inventory
There is currently 12.2 MSF of industrial product under construction. In total, there is 610.1 MSF of industrial product in the Inland Empire.
Net absorption
During Q4 2024, the Inland Empire industrial rebounded with 2.4 MSF of positive net absorption.
Asking rent
Average asking lease rates has dropped 26.7% since posting highs back in 2023. Landlords have offered additional abatements as well as first-year teaser rates on some properties in order to secure deals.
Availabilities
Total available direct and sublet space increased slightly to 9.8% and 2.9%, respectively.
Vacancy
Total vacancy this quarter registered at 8.3% with 6.6% being direct and 1.7% being sublet.
Investment sales
Investment sales for 2024 registered at $264/SF with a sales volume of over $3.2B.
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