The Inland Empire saw 6.7M SF of leasing activity, 7.3% vacancy and $1.04 PSF NNN rents. Net absorption was -2.6M SF due to a lag in backfilling empty spaces.
MARKET DRIVERS
Demand focused on modern big-box and well-located midsize industrial product, with notable deals reflecting ongoing occupier confidence. Key transactions included:
• Maersk at Westcore Hesperia: 1M SF
• iDC Logistics at 5690 Industrial Pkwy: 844K SF
• Several confidential/undisclosed deals ranging from 325K–772K SF.
Despite leasing velocity reaching 6.7M SF, direct vacancy held at 7.3%, while availability remained elevated at 12.6%, due to ongoing backfill times and a significant 8.4M SF underconstruction pipeline.
Capital markets remained firm despite selective bid-ask gaps. Examples include Harley Knox Gateway at $260 PSF and
the Rochester Park portfolio at $275 PSF, highlighting investor preference for newer, functional assets.
Overall, occupiers prioritized efficiency, transportation adjacency, and immediatefunctionality, while landlords leveraged TI packages and free rent to minimize downtime in second-generation space.
FORWARD OUTLOOK
Looking ahead into late 2025 and early 2026, steady absorption is expected as recently signed mega-leases commence and construction deliveries normalize. The 8.4M SF pipeline is increasingly pre-leased or strategically phased (e.g., Hillwood, Clarion, Brookfield), reducing broad-based supply shocks. Key marquee projects such as Speedway Commerce Center (1.81M SF) and Perris Gateway (855K SF) remain focal points for 3PLs and retailers seeking scale.
Rents should remain range-bound near $1.00–$1.10 PSF NNN for large-bay product, with stickier premiums in small-bay parks, while concessions persist selectively to bridge layout/clear height mismatches. Investment activity is likely to favor stabilized or nearstabilized product.
Submarkets with higher vacancy/negative absorption (e.g., Redlands, San Bernardino) may present tenant-friendly conditions, while areas like Jurupa Valley and select Chino/ Chino Hills pockets are likely to tighten first due to recent positive absorption and limited near-term new supply.
3Q 2025 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 Holds Steady: Inland Empire recorded 6.7M SF of leasing in Q3 2025, led by major deals from Maersk and iDC Logistics.
- Vacancy Rate Rises Year-over-Year: Direct vacancy reached 7.3%, up from 6.3% in Q3 2024—a 15.5% increase.
- Net Absorption Turns Negative: Net absorption was -2.6M SF, reflecting lagging backfills and move-outs.
- Average Asking Rent Stable: 8.4M SF under construction, with marquee projects like Speedway Commerce Center (1.81M SF) and Perris Gateway (855K SF) underway.
- Sales Prices Remain Firm: Notable sales included Harley Knox Gateway at $260/SF and Rochester Park portfolio at $275/SF.
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