Inland Empire industrial market report
Q1 2024
The Inland Empire industrial remains to be one of the nation’s top markets for industrial real estate but after a surge in expansion efforts due to the pandemic, it has begun to correct itself. Leasing activities have trended downwards with many occupiers putting a halt on expansion efforts and instead are relinquishing any unused space that was acquired during the pandemic. However, demand from large ecommerce and logistical occupiers remains strong, with several leases exceeding a million square feet this quarter. Lease rates continue to remain at all-time highs but as of late have trended downward as average asking rates were reported at $1.37/sf NNN in the first quarter
Inventory
There is currently 24.8 million square feet of industrial product under construction. In total, there is 591.6 million square feet of industrial product in the Inland Empire. market.
Net absorption
During 1Q 2024, the Inland Empire industrial market fell back into the red with 2.9 msf of negative net absorption. Many occupiers continue to relinquish any unused space and continue to consolidate their industrial footprint. Notably, Skechers put up 1.0 msf up for sublease this quarter.
Asking rent
Average asking lease rates have come down 5.5% from the prior quarter to $1.37/sf NNN.
Availabilities
Total available direct space increased to 59.1 msf and sublet space increased further to a staggering 20.9 msf in the first quarter.
Vacancy
Total vacancy this quarter registered at 7.9% with 5.5% being direct and 2.4% being sublet. Sublet vacancies are up 90 basis points from the prior quarter.
Investment sales
Investment sales continue to decrease with sale prices registering at $191 psf and sale volumes registering at $175M.
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