Q1 2024 Industrial Market Outlook – Inland Empire
MARKET OVERVIEW
The Inland Empire’s industrial market started 2024 by slowing construction momentum. Approximately 7.4 million square feet of completed construction in the first quarter were added to the market, marking a 45.4% decrease from the previous quarter, which saw the largest amount delivered in a single quarter for the Inland Empire. Over the past two years, the region has added approximately 55.3 million square feet of completed construction to the market, while absorption has resulted in a positive 11.8 million square feet during the same timeframe, indicating an imbalance in the supply-demand trajectory.
TRENDS TO WATCH
The abundance of industrial space remains a concern for landlords while offering leverage to tenants in negotiating favorable deals. However, the surge in options for e-commerce warehousing is driving the market as companies pursue flexible solutions to meet evolving demands. Companies actively reducing excess warehouse space have led to a significant increase in available sublease space, up by 28.2% since the end of 2023 and a staggering 176% higher than Q1 2023, totaling over 20.2 million square feet—a new all-time high. In the Inland Empire, available sublease space is now four times greater than Q1 2009 during the Great Recession, providing ample options for companies with warehousing needs as port cargo remains positive.
