The following reflects Inland Empire industrial market conditions as of Q2 2026.
MARKET DRIVERS
The Inland Empire industrial market is showing early signs of a steady recovery, supported by rising demand and easing supply pressures. Leasing activity exceeded 10.1M SF in the second quarter, reflecting solid overall activity, and in several submarkets tenant move-ins are now outpacing move-outs — a sign that occupancy trends may be turning a corner. At the same time, new construction, growing sublease space, and the closure of a handful of third-party logistics facilities pushed total availability higher this quarter. Even so, the market continues to hold a more favorable position and balance than other Southern California markets.
FORWARD OUTLOOK
Kidder Mathews expects rising net absorption — driven by stronger retail sales and investment activity — combined with a slowdown in new development, to gradually shift negotiating leverage back toward landlords and owners. Developers are re-evaluating building design and size to match evolving tenant demand, while lengthening entitlement timelines are adding uncertainty for owners planning mid- to large-format projects. Over the coming year, logistics vacancy is expected to ease somewhat as construction activity slows and demand increases. The Inland Empire’s proximity to the Ports of Los Angeles and Long Beach should keep it positioned as Southern California’s primary hub for bulk distribution, particularly as strong retail demand absorbs existing logistics space and the construction pipeline continues to shrink.
Frequently Asked Questions
What is the industrial vacancy rate in the Inland Empire for Q2 2026?
The direct vacancy rate in the Inland Empire industrial market ended Q2 2026 at 7.6%, according to Kidder Mathews research. That’s up from 7.5% in the prior quarter and 6.6% a year earlier. Total vacancy, which includes sublet space, stood at 8.6% for the quarter (Data source: CoStar).
What is the total availability rate for Inland Empire industrial space?
Total availability reached 12.9% in Q2 2026, according to Kidder Mathews research. That’s up from 12.3% in the prior quarter and 11.4% a year ago, a trend driven in part by new construction deliveries and growing sublease space entering the market (Data source: CoStar).
What are average asking rents for industrial space in the Inland Empire in Q2 2026?
Average direct asking rents were $0.98 per SF per month on a triple net (NNN) basis in Q2 2026, according to Kidder Mathews research. That’s down 4.85% from $1.03 a year earlier, though up slightly from $0.96 in the prior quarter (Data source: CoStar).
How much industrial space was leased in the Inland Empire in Q2 2026?
Total lease transactions covered 10,074,369 SF in Q2 2026, according to Kidder Mathews research. Year-to-date leasing activity totaled 25,689,670 SF, down 55.11% from 57,230,315 SF over the same period in 2025 (Data source: CoStar).
What was net absorption for Inland Empire industrial in Q2 2026?
Net absorption was negative 186,642 SF in Q2 2026, according to Kidder Mathews research. Negative net absorption means more industrial space was vacated than newly occupied during the quarter; even so, year-to-date net absorption remained positive at 1,387,417 SF, reflecting a stronger first quarter (Data source: CoStar).
How much industrial space is under construction in the Inland Empire?
Approximately 6,853,803 SF of industrial space was under construction in the Inland Empire as of Q2 2026, according to Kidder Mathews research. New deliveries totaled 296,000 SF during the quarter, and the overall construction pipeline continues to contract as developers pull back on new starts (Data source: CoStar).
How much new industrial space delivered in the Inland Empire in Q2 2026?
New construction deliveries totaled 296,000 SF in Q2 2026, according to Kidder Mathews research. Limited new supply is helping keep the market balanced even as vacancy holds relatively steady (Data source: CoStar).
What was the largest industrial sale in the Inland Empire in Q2 2026?
The largest sale was 1660 N Linden Ave in Rialto, a two-property Amazon portfolio totaling 1,469,848 SF that sold for $270,000,000, or $183.69 per SF, according to Kidder Mathews research. Premier Logistics Properties purchased the asset from Link Logistics Real Estate (Data source: CoStar).
What was the average industrial sale price and cap rate in the Inland Empire in Q2 2026?
The average sale price was $191.56 per SF in Q2 2026, with an average cap rate of 6.0%, according to Kidder Mathews research. Total sale transactions covered 4,644,121 SF during the quarter (Data source: CoStar).
What was the largest industrial lease signed in the Inland Empire in Q2 2026?
The largest lease was signed at Perris Logistics Center North in the Inland Empire East submarket, where Medline Industries, LP. leased 1,020,657 SF from IDI Real Estate Group in May 2026, according to Kidder Mathews research (Data source: CoStar).
What is the outlook for the Inland Empire industrial market?
Kidder Mathews expects vacancy to ease somewhat over the coming year as new construction slows and demand for logistics space increases, according to Kidder Mathews research. The market’s proximity to the Ports of Los Angeles and Long Beach should keep it positioned as Southern California’s primary hub for bulk distribution as the construction pipeline continues to contract.
Last updated: Q2 2026. Data source: CoStar, EDD. Compiled by the Kidder Mathews Research Group.
2Q 2026 Inland Empire Industrial Market: Key Data Points
Explore our full Inland Empire industrial market review for deeper insights into leasing trends, sale activity, and submarket performance.
- Leasing Activity Remains Robust: Industrial leasing totaled 25.7M SF year-to-date, highlighting continued demand for warehouse and distribution space across the Inland Empire.
- Vacancy Rates Stabilize: The direct vacancy rate ended Q2 2026 at 7.6%, only slightly above the previous quarter as market conditions continue to normalize.
- Positive Year-to-Date Absorption: Net absorption reached 1.3M SF year-to-date, reflecting improving tenant occupancy despite a modest negative absorption figure during the quarter.
- Construction Pipeline Continues to Contract: Industrial space under construction totaled 6.9M SF, as developers scale back new projects in response to changing market conditions and longer lease-up timelines.
- Asking Rents Remain Near Historic Highs: Average asking rents measured $0.98 PSF NNN per month, maintaining strong pricing levels despite a slight year-over-year decline.
- Limited New Deliveries Support Market Balance: New construction deliveries totaled just 296K SF during Q2, helping reduce future supply pressures and support long-term market fundamentals.
Submarket Statistics
| Submarket | Total Inventory (SF) |
Direct Vacancy Rate |
Total Vacancy Rate |
2Q26 Direct Net Absorption (SF) |
SF Under Construction |
2Q26 Total Leasing Activity (SF) |
Average Direct Rental Rate (NNN) |
|---|
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | 2Q26 Direct Net Absorption (SF) | SF Under Construction | 2Q26 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| Chino/Chino Hills | 57,023,862 | 4.6% | 5.1% | -762,686 | 0 | 688,415 | $1.05 |
| Eastvale | 14,624,545 | 9.8% | 9.8% | -593,010 | 0 | 28,029 | $1.24 |
| Fontana | 79,587,515 | 10.9% | 12.0% | -1,310,764 | 284,657 | 1,362,945 | $0.96 |
| Jurupa Valley | 38,417,635 | 7.8% | 8.9% | 298,712 | 0 | 897,938 | $1.08 |
| Mira Loma | 946,510 | 0.0% | 0.0% | 7,424 | 0 | 7,424 | $1.05 |
| Montclair | 4,588,920 | 10.4% | 10.4% | -87,450 | 0 | 20,182 | $1.04 |
| Ontario | 131,278,684 | 6.8% | 7.3% | 565,348 | 602,593 | 2,117,265 | $1.08 |
| Rancho Cucamonga | 43,853,464 | 7.0% | 7.2% | 415,265 | 151,455 | 944,391 | $1.08 |
| Upland | 4,108,627 | 3.1% | 3.1% | 1,152 | 0 | 27,882 | $0.91 |
| West | 374,429,762 | 7.6% | 8.2% | -1,466,009 | 1,038,705 | 6,094,471 | $1.06 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | 2Q26 Direct Net Absorption (SF) | SF Under Construction | 2Q26 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| Banning | 2,029,755 | 4.2% | 4.2% | 300 | 312,206 | 15,000 | $0.91 |
| Beaumont | 6,367,666 | 0.1% | 0.1% | 0 | 0 | 0 | $0.70 |
| Bloomington | 11,830,628 | 5.0% | 5.0% | -172,380 | 0 | 2,400 | $0.00 |
| Colton | 11,291,551 | 8.2% | 8.2% | -8,532 | 0 | 8,460 | $0.96 |
| Corona | 33,223,141 | 4.7% | 5.1% | 134,425 | 0 | 328,248 | $1.16 |
| Grand Terrace | 438,417 | 1.5% | 1.5% | -5,218 | 0 | 0 | $0.00 |
| Highland | 2,434,929 | 0.0% | 0.0% | 0 | 0 | 0 | $0.00 |
| Loma Linda | 453,631 | 0.0% | 0.0% | 17,951 | 0 | 17,951 | $0.97 |
| Moreno Valley | 34,043,851 | 6.0% | 6.2% | 759,528 | 42,510 | 21,000 | $0.90 |
| Norco | 2,585,924 | 13.6% | 13.6% | 7,530 | 0 | 189,781 | $0.99 |
| Perris | 48,371,359 | 8.6% | 11.3% | -124,133 | 1,651,668 | 544,295 | $0.97 |
| Redlands | 31,582,154 | 7.3% | 9.8% | 145,371 | 0 | 33,397 | $0.85 |
| Rialto | 32,153,167 | 9.6% | 13.3% | 58,436 | 510,971 | 18,456 | $0.93 |
| Riverside | 60,350,653 | 8.1% | 10.7% | -370,567 | 136,615 | 974,532 | $0.91 |
| San Bernardino | 45,255,317 | 11.2% | 11.3% | 742,403 | 101,235 | 1,633,168 | $0.90 |
| East | 322,412,143 | 7.8% | 9.4% | 1,185,114 | 2,755,205 | 3,786,688 | $0.91 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | 2Q26 Direct Net Absorption (SF) | SF Under Construction | 2Q26 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| Hemet | 2,469,521 | 2.4% | 2.4% | -17,000 | 0 | 0 | $1.20 |
| Lake Elsinore | 2,814,167 | 4.7% | 4.7% | 62,084 | 149,500 | 55,509 | $0.95 |
| Menifee | 1,856,670 | 26.1% | 26.1% | 221,516 | 2,910,393 | 13,432 | $0.00 |
| Murrieta | 4,718,838 | 1.8% | 2.2% | -5,103 | 0 | 26,701 | $0.93 |
| San Jacinto | 1,167,464 | 0.6% | 0.6% | 20 | 0 | 2,480 | $0.85 |
| Temecula | 9,922,683 | 4.5% | 4.9% | -167,264 | 0 | 88,391 | $1.08 |
| Wildomar | 329,540 | 0.0% | 0.0% | 0 | 0 | 6,697 | $1.15 |
| South | 23,278,883 | 5.2% | 5.5% | 94,253 | 3,059,893 | 193,210 | $1.04 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | 2Q26 Direct Net Absorption (SF) | SF Under Construction | 2Q26 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| Inland Empire Total | 720,120,788 | 7.6% | 8.6% | -186,642 | 6,853,803 | 10,074,369 | $0.98 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | 2Q26 Direct Net Absorption (SF) | SF Under Construction | 2Q26 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| 5,000 – 24,999 SF | 72,520,337 | 4.1% | 4.3% | -106,949 | 75,639 | 786,735 | $1.08 |
| 25,000 – 49,999 SF | 53,076,050 | 5.8% | 6.3% | 78,778 | 264,546 | 492,397 | $1.04 |
| 50,000 – 99,999 SF | 63,954,341 | 7.2% | 7.6% | -337,162 | 197,633 | 852,205 | $1.03 |
| 100,000 – 249,999 SF | 129,427,446 | 10.4% | 11.3% | -1,254,113 | 613,195 | 2,704,281 | $1.01 |
| 250,000 – 499,999 SF | 144,061,367 | 12.2% | 13.5% | -1,481,766 | 1,140,729 | 1,819,976 | $0.94 |
| 500,000 – 999,999 SF | 153,127,629 | 6.1% | 6.8% | 2,914,570 | 1,242,649 | 3,418,775 | $0.96 |
| 1,000,000 Plus SF | 104,057,284 | 3.5% | 6.0% | 0 | 3,319,412 | 0 | $0.00 |
Data as of Q2 2026. Source: CoStar, EDD. Prepared by the Kidder Mathews Research Group.
Significant Sale Transactions 2Q 2026
| Property | Submarket | SF | Sale Price | $/SF | Buyer | Seller |
|---|---|---|---|---|---|---|
| 1660 N Linden Ave – Amazon (2 Properties) | Inland Empire East | 1,469,848 | $270,000,000 | $183.69 | Premier Logistics Properties | Link Logistics Real Estate |
| San Bernardino Logistics Ctr | Inland Empire East | 806,322 | $121,500,000 | $150.68 | Bridge Logistics Properties | EQT Real Estate |
| Transwestern Logistics Center San Bernardino | Inland Empire East | 392,983 | $102,176,000 | $260.00 | Amazon | Transwestern Real Estate Services |
| NWC Winchester Rd. & Diaz Rd | Inland Empire East | 275,243 | $37,500,000 | $136.24 | SENTRE, Inc. | EQT Real Estate |
| 515 S Promenade Ave | Inland Empire East | 166,521 | $32,000,000 | $192.17 | Sagard Real Estate | Blackstone Real Estate |
| 10740 Banana Ave | Inland Empire West | 133,115 | $30,100,000 | $226.12 | Bridge Logistics Properties | LBA Logistics |
Significant Lease Transactions 2Q 2026
| Property | Submarket | SF | Transaction Date | Landlord | Tenant |
|---|---|---|---|---|---|
| Perris Logistics Center North | Inland Empire East | 1,020,657 | May 2026 | IDI Real Estate Group | Medline Industries, LP. |
| Cajon Distribution Ctr | Inland Empire East | 830,750 | May 2026 | Ares Management Corporation | Centric Brands |
| Wineville Center Pointe | Inland Empire East | 656,661 | May 2026 | Alere Property Group, LLC | Undisclosed |
| Glen Helen Distribution Ctr | Inland Empire East | 616,710 | May 2026 | Alere Property Group, LLC | Undisclosed (Sublease) |
| Kaiser Commerce Ctr | Inland Empire West | 544,717 | April 2026 | Prologis, Inc. | Bradshaw Home (Renewal) |
| Crossroads Business Park | Inland Empire West | 504,530 | April 2026 | Prologis, Inc. | New Balance (Renewal) |
Significant Under Construction
| Property | Address | Submarket | SF | Owner | Delivery |
|---|---|---|---|---|---|
| Amazon Fulfillment Ctr | Phelan Rd | Inland Empire East | 2,500,000 | Amazon | September 2026 |
| Menifee Valley Business Park | 26155-26375 Malaga Rd | Inland Empire East | 1,863,854 | Hillwood Development Corp | September 2026 |
| 21103 Lafayette St | 21103 Lafayette St | Inland Empire East | 1,207,135 | Redwood West | July 2026 |
| Menifee Commerce Ctr | 26250 Sherman Rd | Inland Empire East | 1,046,539 | Core5 Industrial Partners | December 2026 |
| Perris Fulfillment Ctr | 815 S Redlands Ave | Inland Empire East | 1,020,657 | IDI Logistics | May 2027 |
| Ellis Logistics Ctr | 409 E Ellis Ave | Inland Empire East | 631,011 | The Carlyle Group | June 2027 |
Data as of Q2 2026. Source: CoStar, EDD. Prepared by the Kidder Mathews Research Group.
ContactGARY BARAGONA |
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