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Current Inland Empire Industrial Real Estate Trends

Results of 1Q2017 for the Inland Empire industrial real estate market and the news appear to be very good. The industrial real estate trends still show that all types of commercial properties are still in high demand in the Inland Empire.

Highlights Of First Quarter Results

  • The first quarter shows a net absorption of minus 950,656 square feet of space. While this may seem alarming to some people active in the commercial industrial real estate industry, this small loss is really nothing compared to the fact that over 2 million square feet of property was leased during this same quarter. The Inland Empire is one of the few areas that can actively state that they are continuing to have this large of square footage absorption each quarter.
  • Rental rates increased during the first quarter to $6.48 per square foot on average for warehouse space. This has been a continuing trend in the Inland Empire making ownership a very profitable choice for investors and business owners. Rental rates are expected to continue to rise as demand for properties increases during the next three quarters.
  • Vacancy rates for the area increased from 3.4 percent to 3.8 percent. However, there were two major companies that left the area during this period. Mattel and Oakley, Inc both moved out of their structures during the first quarter accounting for almost 1 million square foot of space. In addition, 24 new buildings were delivered during this time period adding 3,487,220 square feet of available space to the inventory.
  • Commercial industrial real estate Inland Empire inventory at the end of the first quarter consists of 581,151,832 square feet of industrial space contained in 12,945 buildings. Of this figure, 12,042 buildings equaling 565,809,338 square feet is warehouse space with the remainder belonging to flex office space.
  • The unemployment rate in California dropped to 5.1 percent during the first quarter. The Inland Empire is responsible for creating 13,500 new jobs during this time period as related to the warehouse industry.

Exciting Industrial Real Estate News

Expected trends for industrial real estate in the Inland Empire are expected to continue to increase for the rest of the year. Low availability of properties near the coast and an increase in warehouse structures by businesses of all industries is driving companies of all sizes into the area in search of industrial real estate Inland Empire.

Leading the pack is Amazon. Amazon has just announced that it will add an additional 1.7 million square feet of warehouse space in the Inland Empire. Amazon already has several warehouse distribution centers located throughout the Empire and is one of the largest companies in the area. As a leader in the online sales industry, many similar companies will follow suit and seek more warehouse space as their sales convert from storefronts to online sales.

At the end of the first quarter there was almost 27 million square feet of new construction taking place throughout the Inland Empire. This is significant growth and exceeds any other inland port in the United States.

Why Companies Desire Properties In The Inland Empire

Every commercial real estate agent can explain that the properties in the Inland Empire are so high in demand for the following reasons:

  • Cost per square foot. Industrial real estate brokers know that they can secure square foot costs for their clients that are much more reasonable than those found in coastal communities.
  • Access to the Ports. The Ports of Los Angeles and Long Beach are the two busiest ports in the United States. The Inland Empire is located only 30 minutes from these ports, which provide businesses with better access to importing and exporting their goods.
  • Access to transportation. The Empire is located near trains and trucking companies, making shipping and receiving much easier and cost effective for the companies located in the area.
  • Easy to convert buildings. With the amount of new construction and the availability of previously owned structures, companies from all industries can easily find the type of building they need to easily convert to their own use.

The Inland Empire Consists Of Many Communities

The Inland Empire covers 27,000 square miles of land and is located in two counties. There are over four million people that live and work within the Empire, and many communities are growing at exponential rates. Much of this land is undeveloped and the potential for growth is superior to other areas of California and the United States.

Because the area is so large, businesses can secure a building in whatever area they prefer based on price, size and available workforce. A business can speak to an industrial real estate agent Rancho Cucamonga to find properties in that area or speak with an industrial real estate agent Fontana and find similar sized and priced properties.

Industrial real estate agents Inland Empire, such as the Lee Chang Group, generally represent properties throughout the entire Empire area to ensure that they can meet the needs of their clients by offering a large selection of properties.

The Lee Chang Group is an industrial real estate company that serves the entire Inland Empire and Greater Los Angeles area. Offering buyer, seller, investor and landlord and tenant representation services, the Lee Chang Group is one of the most active industrial real estate companies in the Inland Empire area.

Their company offers highly qualified industrial real estate agents that understand the commercial real estate industry. Each industrial real estate agent Inland Empire is continually receiving training to provide the best service. They can easily show industrial condos for sale to one client and office industrial Inland Empire properties to the next client with the same knowledge and expertise.

If you are looking for properties within the Inland Empire, desire to invest into a rental, or wish to sell your property, you are encouraged to speak with one of the professional agents at the Lee Chang Group about your real estate needs. The Lee Chang Group works in all areas of the Inland Empire and is well known for their exceptional performance in selling and securing properties fast for their clients.


Sources: Q1 2017 Inland Empire CoStar, Q1 2017 Inland Empire Xceligent

The Inland Empire is now considered the busiest inland port in the United States. There are 12 inland ports located throughout the U.S., and include Inland Empire, Phoenix, Fort Worth/Dallas, St. Louis, Memphis, Columbus, Chicago, the Eastern and Central area of Pennsylvania, Greenville, and Atlanta. To be considered an inland port, the area must have a rail connection to a major seaport and have access to transportation infrastructure such as railways and trucking systems.

Industrial real estate trends for the Inland Empire have shown that this area has experienced the highest rate of growth out of the 12 inland port areas in the U.S.

The growth being experienced in the Inland Empire can be directly attributed to the increase in ecommerce sales. Companies need to bring products into an area where they can be sorted into smaller quantities and packed for distribution to consumers once they have left the sea ports. The Inland Empire has become a leader for this process in the nation due to availability of industrial warehouse space, affordable square footage costs, and proximity to the two busiest ports in the U.S.

The Ports of Los Angeles and Long Beach have released their figures for January 2017. Each port is reporting a 10.6 percent increase in shipping container volume entering the ports. The ports have also stated that nationally there is an overall increase in imports by 5 percent for January. This is the largest increase experienced in the ports for over two years. Experienced real estate brokers understand that this significant increase in product entering the country will result in high demand for warehouse and distribution space in the Inland Empire.

In 2016, the Inland Empire had a growth rate of 4.6 percent for newly added industrial space. This space was quickly absorbed, and the Inland Empire ended the year with an availability rate of 7.6 percent overall. This is significantly lower than most industrial areas of the country. It is the belief of many industrial real estate brokers that the availability percentage for 2017 will be much lower as demand for properties continues to rise to meet the demands of ecommerce companies.

Several new projects are intended for the Inland Empire during 2017. However, demand is already outpacing newly built properties in this area and several properties have already been leased before construction has even started. This trend is also expected in currently available properties.


Source: Wall Street Journal

The industrial real estate market for the Inland Empire in 2017 should continue to experience significant growth. It is anticipated that more industrial real estate companies will develop new properties within the area as vacancies continue to fill. With more brick and mortar stores converting to online only sales, the need for warehouse and distribution space will continue to grow.

Every industrial real estate agent in the Inland Empire area is preparing for a very busy year in 2017. Announcements by major retailers like Amazon about improving shipping times by opening new distribution centers in 2017 is a signal for what agents should expect in the New Year. Many smaller retailers will follow the steps Amazon takes in an effort to remain competitive.

Industrial real estate market data for Q4 2016 for the Inland Empire has been released, and the results are incredible. Positive net absorption for the fourth quarter totaled 4,956,520 square feet. Industrial research also shows that at the end of Q4 the vacancy rate for Industrial real estate Inland Empire has dropped to 4.6 percent. This is a drop of .5 percent from the third quarter.

Commercial industrial real estate sub lease vacancies have increased during the fourth quarter to 1,533,201 square feet. This is up from 1,361,667 square feet in quarter three. However, industrial research has shown that sub lease square footage in the Inland Empire fluctuates greatly throughout the year.

Industrial real estate agents have reported that there has been a 1 percent increase in rental costs for industrial space. The new average cost per square foot is $6.31 compared to $6.25 in the third quarter. Flex office space ended the year with an average of $12.01 per square foot and warehouse space remained constant at $6.12 per square foot.

Industrial Real Estate Agents Pleased With Current Industrial Reports

Current industrial reports show that the industrial real estate trends being experienced in the Inland Empire throughout 2016 are set to continue for the foreseeable future. Vacancy rates and rental prices have consistently performed above national average. In addition to the performance rates of available properties, the potential for new construction over the next several years is enormous as industrial real estate companies move to meet the demand of businesses needing manufacturing and distribution centers.

Industrial real estate Inland Empire has experienced significant growth throughout 2016 as many major retailers have opted to place new distribution centers within the area. The trend for online fulfillment centers continues to grow throughout the country, and the Inland Empire offers prime commercial industrial real estate at a very affordable price.

Businesses can easily expand their real estate space without significantly increasing their operating costs. In fact, many businesses can relocate into larger properties in the Inland Empire and decrease their overhead costs. The access to various shipping methods, as well as the close proximity to the Port of Los Angeles and the Port of Long Beach, helps to reduce costs for manufacturers and distributors.

4th Quarter Industrial Real Estate Market Trends - Warehouse Brokers Inland Empire News, Companies, Agents News Infographic


Information Source: Inland Empire Industrial Real Estate Trends (Q4 2016). Source: NAI Capital Commercial Real Estate, CoStar.

Real estate data for Q3 2016 for the Inland Empire has been released and the figures are very positive. Third quarter data shows a positive net absorption of 433,715 square feet of industrial space. This positive absorption occurred even after a major setback for the industrial real estate market in the West Inland Empire area.

Sports Authority and Sport Chalet both entered into bankruptcy during this period and 901,551 square feet of space became available as these companies closed their distribution centers. Regardless of this loss, the overall area still gained 433,715 square feet of used space, proving that the Inland Empire continues to dominate the commercial property industry in California and in the United States.

Current industrial reports show, however, that large leases continued to occur within this industrial area, with an extraordinarily large lease occurring during Q3 involving Floor and Décor who leased over 1 million square feet of space during this period. Lease and purchases occurring throughout the Inland Empire ranged from small flex office space building to large industrial warehouses.

Industrial Research Shows High Demand for Inland Empire Properties

Industrial real estate trends show that Q4 will again show an increase in the amount of leased or sold properties within the Inland Empire. Demand for commercial space continues to grow as companies of all sizes convert their businesses into Internet based fulfillment businesses as opposed to brick and mortar businesses. In fact, Wal-Mart Corp announced at their Q3 meeting in October 2016 that they will be focusing the next two years on converting their business into a more Internet based retailer than store front operations.

As any California industrial real estate broker will inform their client, the properties available in the Inland Empire offer businesses a way to reduce their operating costs through low property costs while retaining their ability to have easy access to supplies and transportation. The Inland Empire is located right outside of Los Angeles and has easy access to several major freeways and highways, the railroad system, an international airport and the ports in Long Beach and Los Angeles.

current industrial marketsplace research reports inland empire industrial real estate agents companies


Information Source: Inland Empire Industrial Real Estate Trends (Q3 2016). Source: xceligent

Data has been released for Q2 2016 for the industrial real estate market in the Inland Empire area of California, and the figures are astounding. Current real estate trends in this area continue to outperform other industrial areas throughout California and the country.

Demand for space in this area continues to grow and vacancy rates have dropped 20 points from the first quarter to 4.9 percent. This is an astounding figure for any industrial real estate area. In addition to the high demand for leased space, rents have continued to increase in this area at the same time.

A new announcement by Amazon and QVC is driving demand for commercial real estate space in this area as well. Both of these major retailers are building warehouses in excess of one million square feet each in the Inland Empire. Access to the ports in Los Angeles and Long Beach has made this area a desirable spot for retailers of all sizes looking for commercial warehouse space.

Commercial Real Estate Sales Increasing Steadily

If the leasing figures for industrial real estate in the Inland area were not astounding enough, current real estate trends for sales in this area are phenomenal.

Second quarter figures show that sales volume increased 30.5 percent over the prior quarter and over 27 percent over the prior year. Over 6.5 million square feet was sold during this quarter. These current real estate trends are anticipated to continue in the Inland area as more retailers convert to online sales and seek warehouse and distribution centers for their businesses instead of brick and mortar store fronts.

New data released by the U.S. Department of Commerce this year shows that this type of commercial real estate activity is expected to continue for the foreseeable future. The Department of Commerce is anticipating a large portion of retailers to convert to online only sales, driving commercial real estate properties to increase in demand.

Industrial Warehouse Investment Outlook

Commercial space in the Greater Los Angeles area has become very expensive and businesses are looking for newer, larger, and more affordable commercial properties outside of the main area, but still close enough to transportation. The Inland Empire continues to meet this need for businesses and will do so for the foreseeable future.

These current real estate trends for the Inland Empire will continue to impress investors and business owners as more warehouse facilities and industrial real estate become available in the future.

commercial industrial real estate inland empire q2 trends infographics industrial real estate agents companies


Information Source: Inland Empire Industrial Real Estate Trends (Q2 2016). Source: NAI Capital Commercial Real Estate, CoStar.

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