Rental rates continue to grow while obstacles emerge for future development
The Inland Empire industrial real estate market is one of the tightest in the U.S. due to demand for e-commerce fulfillment and last-mile space as supply chain challenges continue. Overall vacancy increased 30 basis points (bps) over the last quarter to 1.5%. This is down 130 bps from the total vacancy rate of 2.8% reported a year ago. Despite the tight conditions, developers are also feeling pushback from Inland Empire cities as measures are made to temporarily halt new warehouse developments. The cities of Pomona, Redlands, Norco and Colton have all moved to pause new warehouse developments. Despite these headwinds, the Inland Empire market is seeing robust leasing activity as consumer demand remains strong.