The following reflects Inland Empire industrial market conditions as of Q3 2026.
MARKET DRIVERS
Supply and demand in the Inland Empire industrial market continue to move toward greater balance. Tenants leased 9,201,000 square feet during Q3 2026, and direct net absorption totaled 2,862,807 square feet, bringing the 2026 year-to-date total to 5,023,016 square feet. Direct vacancy ended the quarter at 7.1%, compared with 7.5% in Q2 2026 and 7.4% in Q3 2025, while total availability stood at 12.9%, up from 12.1% in both of those periods.
Sublease space continued to be absorbed during the quarter, new construction starts declined, and stronger retail sales point to improving occupancy fundamentals and a more balanced supply pipeline. The Inland Empire remains a key market for bulk distribution, handling goods that arrive through West Coast ports.
FORWARD OUTLOOK
Lease rates continue to stabilize, with pricing varying by location, building size, and property class. The direct asking lease rate averaged $0.99 per square foot per month on a triple net (NNN) basis in Q3 2026, compared with $0.98 in Q2 2026 and $1.02 in Q3 2025. Sublease space remains an attractive alternative for tenants, while higher rental rates continue to be concentrated in the West Inland Empire, where proximity to Southern California ports and a large industrial workforce support demand.
Import volumes through Southern California ports have fluctuated, adding some uncertainty for industrial occupiers. Tenants still hold leverage, but available space continues to be absorbed and new construction remains limited, supporting a gradual move toward greater market balance.
Frequently Asked Questions
What is the industrial vacancy rate in the Inland Empire in Q3 2026?
The Inland Empire industrial direct vacancy rate was 7.1% at the end of Q3 2026, according to Kidder Mathews research. That is down from 7.5% in Q2 2026 and 7.4% in Q3 2025. The total vacancy rate, which includes sublease space, was 8.3%. (Data source: CoStar)
What is the industrial availability rate in the Inland Empire in Q3 2026?
Total industrial availability in the Inland Empire was 12.9% in Q3 2026, up from 12.1% in both Q2 2026 and Q3 2025, according to Kidder Mathews research. Availability runs higher than vacancy because it also counts space that is being marketed but is not yet vacant. (Data source: CoStar)
What are industrial asking rents in the Inland Empire in Q3 2026?
The average direct asking lease rate for Inland Empire industrial space was $0.99 per square foot per month on a triple net (NNN) basis in Q3 2026, according to Kidder Mathews research. That compares with $0.98 in Q2 2026 and $1.02 in Q3 2025. Among submarkets reporting rates, averages ranged from $0.85 (Redlands and San Jacinto) to $1.30 (Beaumont), with the West group averaging $1.05 and the East group $0.93. (Data source: CoStar)
How much industrial space was leased in the Inland Empire in Q3 2026?
Tenants leased 9,201,000 square feet of industrial space in the Inland Empire in Q3 2026, according to Kidder Mathews research. Year-to-date leasing totaled 44,973,347 square feet, down 21.38% from 57,204,615 square feet in the same period of 2025. Perris led submarkets in Q3 leasing activity with 2,628,580 square feet, followed by Ontario with 1,850,209 square feet. (Data source: CoStar)
What was industrial net absorption in the Inland Empire in Q3 2026?
Direct net absorption in the Inland Empire industrial market was positive 2,862,807 square feet in Q3 2026, according to Kidder Mathews research. Net absorption measures the change in occupied space, so a positive figure means tenants occupied more space than they vacated. Year-to-date absorption reached 5,023,016 square feet, compared with 3,472,450 square feet in 2025 year-to-date. Fontana recorded the largest quarterly gain at 2,050,020 square feet, while Rancho Cucamonga posted the largest decline at -1,995,227 square feet. (Data source: CoStar)
How much industrial space is under construction in the Inland Empire in Q3 2026?
The Inland Empire had 11,520,650 square feet of industrial space under construction at the end of Q3 2026, according to Kidder Mathews research, and new deliveries were reported at 413K square feet. The largest project is The Hub at 3560 E Airport Dr in Inland Empire West, a 2,535,282-square-foot development owned by the Ontario Int’l Airport Authority with delivery set for September 2026 and June 2027. The Amazon Fulfillment Center on Phelan Rd is next at 2,500,000 square feet, due in December 2026. (Data source: CoStar)
How much industrial space sold in the Inland Empire in Q3 2026, and at what price?
Industrial sale transactions in the Inland Empire totaled 2,106,991 square feet in Q3 2026, according to Kidder Mathews research. Year-to-date sales volume of 10,774,564 square feet was up 3.64% from 10,396,029 square feet in 2025 year-to-date. The average sale price was $231.31 per square foot with a cap rate of 5.9%. (Data source: CoStar)
What was the largest industrial sale in the Inland Empire in Q3 2026?
The largest Inland Empire industrial sale of Q3 2026 was Stratford Ranch in Perris, a 1,008,000-square-foot property in Inland Empire East that sold for $193,152,500, or $191.62 per square foot, according to Kidder Mathews research. Prologis, Inc. was the buyer and IDI Logistics was the seller. The second-largest sale was the three-building Interchange Logistics Center, which EQT Real Estate acquired from Cabot Properties, Inc for $119,500,000. (Data source: CoStar)
What were the largest industrial leases in the Inland Empire in Q3 2026?
The largest Inland Empire industrial lease of Q3 2026 was Wayfair’s 2,008,281-square-foot renewal at Duke Perris Logistics Center in Inland Empire East, signed in July 2026, according to Kidder Mathews research. DP World Logistics leased 1,331,763 square feet at Moreno Valley Logistics Center, and CEVA Logistics leased 1,286,569 square feet at Speedway Commerce Center (East). (Data source: CoStar)
Which Inland Empire industrial submarkets had the highest vacancy in Q3 2026?
Menifee had the highest direct industrial vacancy rate in the Inland Empire in Q3 2026 at 14.1%, followed by Norco at 11.3%, Rancho Cucamonga at 11.2%, and San Bernardino at 10.6%, according to Kidder Mathews research. By group, direct vacancy was 7.2% in the West, 7.3% in the East, and 4.1% in the South. (Data source: CoStar)
What is the outlook for the Inland Empire industrial market after Q3 2026?
Kidder Mathews research expects the Inland Empire industrial market to continue moving gradually toward greater balance. Lease rates continue to stabilize, tenants retain leverage through flexible lease terms and concessions, and available space continues to be absorbed while new construction remains limited. Higher rental rates remain concentrated in the West Inland Empire, near Southern California ports and a large industrial workforce, while fluctuating import volumes add uncertainty for occupiers.
Last updated: Q3 2026. Data source: EDD, CoStar. Compiled by the Kidder Mathews Research Group.
Q3 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.
- Vacancy: Direct vacancy ended Q3 2026 at 7.1%, down from 7.5% in Q2 2026 and 7.4% in Q3 2025, and total vacancy was 8.3%.
- Availability: Total availability was 12.9%, up from 12.1% in both Q2 2026 and Q3 2025.
- Net absorption: Direct net absorption was positive 2,862,807 square feet in Q3 2026 and 5,023,016 square feet year-to-date.
- Leasing activity: Tenants leased 9,201,000 square feet in Q3 2026, led by Wayfair’s 2,008,281-square-foot renewal at Duke Perris Logistics Center.
- Asking rents: The average direct asking lease rate was $0.99 per square foot per month (NNN), compared with $1.02 a year earlier.
- Construction: 11,520,650 square feet was under construction at quarter-end, including The Hub in Ontario at 2,535,282 square feet.
- Sale activity: The average sale price was $231.31 per square foot at a 5.9% cap rate, and Stratford Ranch in Perris was the largest sale at $193,152,500.
Submarket Statistics
| Submarket | Total Inventory (SF) |
Direct Vacancy Rate |
Total Vacancy Rate |
Q3 2026 Direct Net Absorption (SF) |
SF Under Construction |
Q3 2026 Total Leasing Activity (SF) |
Average Direct Rental Rate (NNN) |
|---|
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Q3 2026 Direct Net Absorption (SF) | SF Under Construction | Q3 2026 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| Chino/Chino Hills | 56,599,743 | 5.7% | 6.3% | -747,034 | 0 | 560,095 | $1.02 |
| Eastvale | 14,610,494 | 9.3% | 9.3% | 78,165 | 0 | 218,401 | $1.09 |
| Fontana | 79,341,773 | 8.0% | 9.1% | 2,050,020 | 497,077 | 1,096,554 | $0.94 |
| Jurupa Valley | 38,416,860 | 7.0% | 8.4% | 284,278 | 0 | 387,844 | $1.07 |
| Mira Loma | 946,510 | 0.0% | 0.0% | 0 | 0 | 0 | $1.05 |
| Montclair | 4,610,099 | 6.5% | 7.6% | 177,741 | 0 | 13,711 | $1.04 |
| Ontario | 131,535,896 | 5.9% | 7.0% | 1,120,972 | 4,466,328 | 1,850,209 | $1.10 |
| Rancho Cucamonga | 43,680,525 | 11.2% | 11.2% | -1,995,227 | 620,000 | 596,222 | $1.09 |
| Upland | 4,115,630 | 5.0% | 5.0% | -77,351 | 0 | 67,092 | $0.91 |
| West | 373,857,530 | 7.2% | 8.0% | 891,564 | 5,583,405 | 4,790,128 | $1.05 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Q3 2026 Direct Net Absorption (SF) | SF Under Construction | Q3 2026 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| Banning | 2,027,072 | 3.6% | 3.6% | 6,700 | 312,206 | 6,700 | $1.23 |
| Beaumont | 6,367,666 | 0.1% | 0.1% | 0 | 0 | 0 | $1.30 |
| Bloomington | 11,830,628 | 6.3% | 11.5% | -158,774 | 0 | 3,200 | $0.00 |
| Colton | 11,302,488 | 3.0% | 3.0% | 592,961 | 0 | 29,308 | $1.06 |
| Corona | 33,093,705 | 7.3% | 7.7% | -852,178 | 0 | 388,766 | $1.16 |
| Grand Terrace | 436,215 | 1.5% | 1.5% | 0 | 0 | 1,380 | $0.00 |
| Highland | 2,434,929 | 0.0% | 0.0% | 0 | 0 | 0 | $0.00 |
| Loma Linda | 453,631 | 0.0% | 0.0% | 0 | 0 | 0 | $0.97 |
| Moreno Valley | 34,030,486 | 5.1% | 5.3% | 326,999 | 32,510 | 57,840 | $0.89 |
| Norco | 2,588,916 | 11.3% | 11.3% | 114,381 | 0 | 2,265 | $0.99 |
| Perris | 48,368,006 | 7.7% | 10.7% | 644,999 | 1,838,316 | 2,628,580 | $0.98 |
| Redlands | 31,582,154 | 4.1% | 7.1% | 1,013,552 | 0 | 416,619 | $0.85 |
| Rialto | 32,206,667 | 6.7% | 10.4% | 953,902 | 468,563 | 47,176 | $0.88 |
| Riverside | 60,181,651 | 9.6% | 10.7% | -491,978 | 127,263 | 240,707 | $0.92 |
| San Bernardino | 45,205,749 | 10.6% | 11.2% | -410,919 | 101,235 | 475,462 | $0.88 |
| East | 322,109,963 | 7.3% | 8.9% | 1,739,645 | 2,880,093 | 4,298,003 | $0.93 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Q3 2026 Direct Net Absorption (SF) | SF Under Construction | Q3 2026 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| Hemet | 2,469,521 | 2.7% | 2.7% | -9,022 | 0 | 132 | $0.93 |
| Lake Elsinore | 2,814,200 | 3.8% | 3.8% | 24,562 | 149,500 | 23,743 | $1.01 |
| Menifee | 1,856,670 | 14.1% | 14.1% | 223,000 | 2,907,652 | 0 | $0.00 |
| Murrieta | 4,665,199 | 2.1% | 2.7% | -11,805 | 0 | 10,067 | $1.00 |
| San Jacinto | 1,167,464 | 0.9% | 0.9% | -5,000 | 0 | 0 | $0.85 |
| Temecula | 9,930,363 | 4.2% | 4.3% | 14,043 | 0 | 78,927 | $1.09 |
| Wildomar | 336,140 | 1.2% | 1.2% | -4,180 | 0 | 0 | $1.15 |
| South | 23,239,557 | 4.1% | 4.3% | 231,598 | 3,057,152 | 112,869 | $1.05 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Q3 2026 Direct Net Absorption (SF) | SF Under Construction | Q3 2026 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| Total | 719,207,050 | 7.1% | 8.3% | 2,862,807 | 11,520,650 | 9,201,000 | $0.99 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Q3 2026 Direct Net Absorption (SF) | SF Under Construction | Q3 2026 Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|
| 5,000 – 24,999 | 72,527,882 | 3.6% | 3.8% | 265,032 | 56,287 | 838,893 | $1.13 |
| 25,000 – 49,999 | 53,173,931 | 5.5% | 6.1% | 173,079 | 254,961 | 718,438 | $1.03 |
| 50,000 – 99,999 | 63,975,370 | 7.9% | 8.4% | -286,390 | 0 | 1,004,814 | $1.03 |
| 100,000 – 249,999 | 129,534,092 | 9.8% | 10.9% | 710,577 | 1,065,318 | 2,220,255 | $0.98 |
| 250,000 – 499,999 | 142,945,188 | 11.5% | 13.4% | 1,642,085 | 2,056,389 | 1,609,260 | $0.94 |
| 500,000 – 999,999 | 153,083,621 | 5.2% | 5.8% | 106,137 | 3,586,676 | 1,584,466 | $1.05 |
| 1,000,000 Plus | 104,057,254 | 3.2% | 5.9% | 252,287 | 4,501,019 | 1,224,874 | $0.00 |
Significant Sale Transactions Q3 2026
| Property | Submarket | SF | Sale Price | $/SF | Buyer | Seller |
|---|---|---|---|---|---|---|
| Stratford Ranch | Inland Empire East | 1,008,000 | $193,152,500 | $191.62 | Prologis, Inc. | IDI Logistics |
| Interchange Logistics Center (3 Buildings) | Inland Empire East | 667,024 | $119,500,000 | $179.15 | EQT Real Estate | Cabot Properties, Inc |
| Palisade Redlands Logistics Center | Inland Empire East | 356,791 | $63,300,000 | $177.41 | Property Reserve | North Palisade Partners |
| Serrano Business Park I | Inland Empire East | 148,045 | $57,100,000 | $385.69 | MDH Partners | Prospect Ridge |
| Serrano Business Park II | Inland Empire East | 180,840 | $45,029,000 | $249.00 | Southern Tire Mart | Miramar Capital |
| Oakmont Mission Ramona Business Park | Inland Empire West | 187,179 | $42,000,000 | $224.38 | Bayland Health | Oakmont Industrial Group |
Significant Lease Transactions Q3 2026
| Property | Submarket | SF | Transaction Date | Landlord | Tenant |
|---|---|---|---|---|---|
| Duke Perris Logistics Center | Inland Empire East | 2,008,281 | July 2026 | Prologis, Inc. | Wayfair (Renewal) |
| Moreno Valley Logistics Center | Inland Empire East | 1,331,763 | July 2026 | Prologis, Inc. | DP World Logistics |
| Speedway Commerce Center (East) | Inland Empire West | 1,286,569 | July 2026 | Hillwood Development Corporation | CEVA Logistics |
| Shea Center Ontario | Inland Empire West | 748,023 | July 2026 | Shea Properties | Creative Innovations |
| Cajon Distribution Center | Inland Empire East | 671,683 | July 2026 | Invesco Ltd. | GXO Logistics |
| Speedway Commerce Center (West) | Inland Empire West | 500,403 | July 2026 | Hillwood Development Corporation | Undisclosed |
Significant Under Construction
| Property | Address | Submarket | SF | Owner | Delivery |
|---|---|---|---|---|---|
| The Hub | 3560 E Airport Dr | Inland Empire West | 2,535,282 | Ontario Int’l Airport Authority | September 2026 | June 2027 |
| Amazon Fulfillment Center | Phelan Rd | Inland Empire East | 2,500,000 | Amazon | December 2026 |
| Menifee Valley Business Park | 26155-26375 Malaga Rd | Inland Empire East | 1,861,113 | BGRE | December 2026 |
| South Ontario Logistics Center | 961 & 7000 Merrill Ave | Inland Empire West | 1,853,223 | Clarion Partners | November 2026 | June 2027 |
| Menifee Commerce Center | 26250 Sherman Rd | Inland Empire East | 1,046,539 | Core5 Industrial Partners | December 2026 |
| Perris Fulfillment Center | 815 S Redlands Ave | Inland Empire East | 1,020,657 | IDI Logistics | May 2027 |
Data as of Q3 2026. Source: EDD, CoStar. Prepared by the Kidder Mathews Research Group.
ContactGARY BARAGONA |
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