Might the Inland Empire industrial market be cooling a little?
That could be the case, based on one major commercial brokerage’s assessment of how the market finished 2022.
Sales and leases in Riverside and San Bernardino counties fell 9.6 million square feet between last year’s third and fourth quarters, from 18.4 million square feet to 8.3 million square feet, according to Voit Real Estate Services.
Sales velocity, which measures how quickly transactions are completed and begin making money, also declined, from 97 to 74.
“This is the lowest level of activity … in many years, and maybe the clearest signal yet that the bull market has run its course in this cycle,” the report said.
Vacancy fell slightly for the third consecutive month but remained low at 1.4 percent, while net absorption fell from 3.1 million to 2.1 million square feet quarter over quarter, and from 5.5 million square feet from the fourth quarter of 2021.
On the positive side of the ledger, the total inventory after new deliveries was 629 million square feet, while space under construction increased by about 500,000 square feet.
Lease rates provided some of the report’s best news, up nine cents in the fourth quarter to a record $1.59 per square foot.
“Year-over-year, lease rates are up by over 78 percent, fueled by strong demand from logistics companies for state-of-the-art, first-generation space that leases at a premium,” the report states.