- Inland Empire secured 15 of the top 100 industrial leases nationwide during 1H24, totaling 13.5 MSF.
- The region took the top spot once again due to logistics facility consolidation, with large tenants rolling up operations into bigger facilities.
- The Dallas-Fort Worth market, which led in 2023, fell to 2nd place with 9 large leases, while Memphis also secured 9 leases, finishing in 3rd place.
- The national average lease rate rose by 7.7% to around 70 cents PSF, with Inland Empire averaging $1.24 PSF.
According to LA Business First, the Inland Empire region has reclaimed its position as the leading market in the nation for large industrial leases, as reported in The Real Deal.
Topping The Charts
The Inland Empire, encompassing Riverside and San Bernardino counties in CA, captured 15 of the top 100 industrial leases nationwide in the first half of the year, as reported by L.A. Business First. These leases combined for 13.5 MSF, with nearly half being new leases.
The region also led the nation in securing the most industrial lease deals of 1 MSF or more. The Inland Empire’s industrial market surged during the pandemic due to heightened demand for digital commerce and home delivery.
However, like the rest of the country, the region reported a dip in demand over the past year as major tenants, like Amazon, slashed their space requirements.
According to CBRE data, in 2023, the Dallas-Fort Worth market surpassed the Inland Empire as the hottest industrial market. However, in the first half of this year, D-FW fell to second place with nine large leases totaling 8 MSF, followed by Memphis, which also had nine leases accounting for 6.1 MSF.
Tenant Consolidation
Ian Britton, CBRE managing director and regional leader for the Inland Empire, noted that recent industrial deals show a trend of larger tenants consolidating distribution operations into bigger facilities.
This trend is driving demand for facilities offering 1 MSF or more, even as these larger deals take longer to finalize.
Meanwhile, average lease rates nationwide rose by 7.7% in 1H24 to around 70 cents PSF. By comparison, in the Inland Empire, the average rate was much higher, at around $1.24 PSF.
Positive Outlook
With large tenants continuing to consolidate logistics operations, the demand for substantial industrial spaces in the Inland Empire is likely to stay strong.
As the market adapts to changing dynamics and logistical needs, the region is likely to maintain the #1 spot in the nation for industrial leasing, offering plenty of opportunities for investors and developers.
