Figures
Inland Empire Industrial Figures Q1 2025
Fundamentals improve despite delays in decision-making as tenants favors flexibility
April 7, 2025 5 Minute Read
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- The Inland Empire (IE) industrial market started 2025 with positive absorption in both the IE East and IE West, decreasing vacancy for the first time since Q3 2022, and strong leasing activity across all size ranges.
- Declining taking lease rates and stubborn sublease space in the IE East and IE West underscored a reason for continued pragmatism among owners and investors.
- The divergence between submarkets continued as the IE West experienced a 90 basis-point (bps) decrease in vacancy quarter-over-quarter to 4.7%, a modest $0.01 decrease in taking rents to $1.18 NNN per sq. ft. per month, and 2.4 million sq. ft. of positive absorption.
- Although the IE East realized 1.1 million sq. ft. in positive net absorption, vacancy increased 50 bps quarter-over-quarter and taking lease rates decreased $0.11, or 10%, to $0.98 NNN per sq. ft. per month.
- Development continued to dwindle in Q1 2025 with only 9.5 million sq. ft. under construction in the IE Core (IE East and IE West). Across the entire IE, 23.2% of construction space was preleased.
- Construction deliveries outpaced starts for the fourth consecutive quarter with 2.7 million sq. ft. of completed space entering the market, while only 549,000 sq. ft. broke ground.