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Inland industrial shows signs of slowing

The Inland Empire industrial market recorded a 5.9 percent vacancy rate in the first quarter, as net absorption fell for the second time in a year.

Five lease transactions of at least one million square feet were signed during the first three months of 2024, only two less than were signed in all of 2023, according to CBRE’s first quarter industrial report.

There was 20.4 million square feet of industrial space under construction in Riverside and Sand Bernardino counties at the end of the first quarter of 2024, up only 200,000 square feet from the fourth quarter of 2023.

Seventeen percent of the space under construction was pre-leased.

Lease rates fell quarter-over-quarter to $1.36 per square foot in the first quarter from $1.49 per square foot in the last three months of 2023. Year-over-year, lease rates decreased 15 cents, from $1.51 per square foot in the first quarter of 2023.

Overall, in the first quarter, “the Inland Empire industrial market experienced both a continuation of negative trends from 2023 and a divergence from the slowing activity and lackluster sales transactions that occurred in the past year,” the report stated.

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