Q4 2020 Industrial Market Outlook – Inland Empire
In the fourth quarter of 2020, the Inland Empire industrial market continued to battle the
effects of an economy that spent three quarters of the year under a COVID-19 shutdown.
The average asking rent dipped one cent from the prior quarter to $0.71 triple net, down
7.8% from the fourth quarter of 2019. The vacancy rate declined 20 basis points from
the previous quarter’s record low, down 110 basis points from the fourth quarter of
2019 to 3.6%. Pointing to the market’s resilience this time around, vacancy remains 870
basis points lower than the prior peak, which hit in the third quarter of 2009 during the
Great Recession. The exponential growth in demand for ecommerce due to COVID-19
propelled the Inland Empire industrial market to a quick recovery.
Soaring demand for warehouse and distribution space created opportunity for
developers. Completed construction has added more than 2.1M SF to the market in
the fourth quarter. Since the first quarter of 2020, more than 15.8M SF of industrial
space has been completed. Despite the increase in new construction, the demand
outpaced completions by over 6.9M SF – net absorption totaled approximately 22.8M
SF for all of 2020.