Inland Empire Retail Market Report

The following reflects Inland Empire retail market conditions as of Q2 2026.

The Inland Empire retail market in Q2 2026 experienced rising vacancy year-over-year alongside declines in unemployment, rental rates, and construction deliveries. Explore our full Inland Empire retail market report for deeper insights into leasing activity, investment sales, and submarket development trends.

Frequently Asked Questions

What was the retail vacancy rate in the Inland Empire in Q2 2026?

The Inland Empire retail vacancy rate was 6.2% in Q2 2026, according to Kidder Mathews research (Data source: CoStar). That was down slightly from 6.3% in the first quarter of 2026 but up 10 basis points from 6.1% a year earlier in Q2 2025.

How much did retail space cost to lease in the Inland Empire in Q2 2026?

Average asking rents for Inland Empire retail space were $1.72 per square foot per month in Q2 2026, according to Kidder Mathews research (Data source: CoStar). Rents were up from $1.71 in the first quarter of 2026 but down 0.53% year-over-year from $1.73 in Q2 2025.

What was net absorption in the Inland Empire retail market in Q2 2026?

Net absorption in the Inland Empire retail market was 158,880 square feet in Q2 2026, bringing the 2026 year-to-date total to 620,628 square feet, according to Kidder Mathews research (Data source: CoStar). Net absorption measures the change in occupied space over a period, so a positive figure means tenants moved into more space than they vacated. The year-to-date total marked a turnaround from the same period in 2025, when the market posted negative net absorption of -132,236 square feet.

How much retail space was under construction in the Inland Empire in Q2 2026?

There was 1,115,791 square feet of retail space under construction in the Inland Empire as of Q2 2026, according to Kidder Mathews research (Data source: CoStar). That total was down 13.22% from 1,285,697 square feet under construction a year earlier. The largest project underway was The Ranch at Model Colony in the Airport Area submarket, a 206,043-square-foot development scheduled for delivery in Q3 2026.

How much retail construction was delivered in the Inland Empire in Q2 2026?

Inland Empire retail construction deliveries totaled 11,115 square feet in Q2 2026, with 308,383 square feet delivered year-to-date in 2026, according to Kidder Mathews research (Data source: CoStar). Year-to-date deliveries were down 55.30% from the 689,969 square feet completed during the same period in 2025.

What was the largest retail sale transaction in the Inland Empire in Q2 2026?

The largest Inland Empire retail sale in Q2 2026 was 424 Orange Show Road in San Bernardino, a 30,014-square-foot property that sold for $18,950,000, or $631.37 per square foot, according to Kidder Mathews research (Data source: CoStar). Realty Income Corporation purchased the property from ViaWest Group. Other major sales included Arlington Retail Center in Riverside for $16,550,000 and 5261-5265 Arlington Avenue in Riverside for $11,000,000.

What were the largest retail leases signed in the Inland Empire in Q2 2026?

The largest Inland Empire retail lease in Q2 2026 was Target’s 148,605-square-foot lease at Desert Sky Plaza Phase II in the Mojave River Valley submarket, signed in April 2026, according to Kidder Mathews research (Data source: CoStar). Other significant leases included Dick’s Sporting Goods at Crossings At Corona in the Corona/Eastvale submarket (64,163 square feet) and Crunch at Palm Plaza in the Beaumont/Hemet submarket (45,509 square feet).

What was the average retail sale price per square foot in the Inland Empire in Q2 2026?

The average retail sale price in the Inland Empire was $249 per square foot in Q2 2026, down 25.24% from $333 per square foot a year earlier, according to Kidder Mathews research (Data source: CoStar). The average cap rate rose to 6.7% in Q2 2026, up 90 basis points from 5.8% in Q2 2025 and up from 5.6% in the first quarter of 2026.

What is the outlook for the Inland Empire retail market after Q2 2026?

The Inland Empire retail market entered the second half of 2026 with a shrinking construction pipeline and improving tenant demand, according to Kidder Mathews research (Data source: CoStar). Space under construction fell 13.22% year-over-year to 1,115,791 square feet, while net absorption turned positive at 620,628 square feet year-to-date after the market posted negative absorption a year earlier. At the same time, average sale prices fell 25.24% year-over-year to $249 per square foot and cap rates expanded 90 basis points to 6.7%, reflecting a repricing of retail investment assets.

Which Inland Empire submarkets saw the most retail activity in Q2 2026?

Retail activity in Q2 2026 was spread across several Inland Empire submarkets, according to Kidder Mathews research (Data source: CoStar). The Mojave River Valley, Corona/Eastvale, and Beaumont/Hemet submarkets recorded the quarter’s largest leases, while San Bernardino and Riverside saw the largest sale transactions. The Airport Area, South Riverside, and Moreno Valley/Perris submarkets had the largest projects under construction.

Last updated: Q2 2026. Data source: CoStar. Compiled by the Kidder Mathews Research Group.

Q2 2026 Inland Empire Retail Market: Key Data Points

Explore our full Inland Empire retail market review for deeper insights into leasing trends, sale activity, and submarket performance.

• Vacancy Rate: Inland Empire retail vacancy was 6.2% in Q2 2026, up 10 basis points from 6.1% a year earlier and down slightly from 6.3% in Q1 2026.
• Asking Rents: Average asking rents were $1.72 per square foot per month, down 0.53% year-over-year from $1.73 in Q2 2025.
• Net Absorption: The market absorbed 158,880 square feet in Q2 2026 and 620,628 square feet year-to-date, a turnaround from -132,236 square feet over the same period in 2025.
• Construction Pipeline: 1,115,791 square feet of retail space was under construction, down 13.22% year-over-year, while year-to-date deliveries fell 55.30% to 308,383 square feet.
• Investment Pricing: The average sale price fell 25.24% year-over-year to $249 per square foot, while the average cap rate expanded 90 basis points to 6.7%.
• Largest Sale: 424 Orange Show Road in San Bernardino sold for $18,950,000 ($631.37 per square foot), purchased by Realty Income Corporation from ViaWest Group.
• Largest Lease: Target leased 148,605 square feet at Desert Sky Plaza Phase II in the Mojave River Valley submarket in April 2026.

Market Breakdown

Market Breakdown — Year-to-Date Activity

Significant Sale Transactions Q2 2026

Significant Lease Transactions Q2 2026

Significant Under Construction

Data as of Q2 2026. Source: CoStar. Prepared by the Kidder Mathews Research Group.