Inland Empire Industrial Figures Q4 2024

MARKET OVERVIEW

• The divergence between the IE (Inland Empire) West and IE East became more pronounced in Q4 2024 as the IE West continued to show signs of improvement with positive net absorption, falling vacancy rates, and only modest rate declines.
• Alternatively, the IE East continued to struggle in Q4 2024 as net absorption remained negative for the fourth consecutive quarter, the vacancy rate increased, and rate decline was more notable at 4.4% quarter-over-quarter.
• Despite new leasing and user sales activity declining in Q4 2024 by 39% quarter-over-quarter with only 7.9 million sq. ft. transacting, activity in 2024 saw a 57% increase over 2023, boosted by leasing in all size ranges in both the IE West and IE East.
• Construction continued to dwindle with deliveries outpacing starts by almost 3 to 1 as 1.4 million sq. ft. delivered and only 580,000 sq. ft. started in Q4 2024.
• Year-over-year, rates declined by 22.1% from $1.49 NNN per sq. ft. per month in Q4 2023 to $1.16 NNN per sq. ft. per month in Q4 2024 as the market readjusted from the unsustainable growth from 2020 to 2022.
• Overall, the Inland Empire remained an attractive market for occupiers looking to capitalize on relatively affordable rates and landlords poised to sign the next deal.