Riverside-San Bernardino Industrial Market Report

Supply-induced vacancy spike expected for a second straight year. From mid-2021 through 2022, industrial vacancy in the Inland Empire held below 2 percent. These historically tight conditions elicited multiple waves of project starts, with 2024 slated to receive the largest deluge of space from these groundbreakings. Of the more than 25 million square feet scheduled to come online this year, roughly half is in Ontario and Fontana, proximate to Ontario International Airport. Remaining additions are concentrated in the Riverside County cities of Jurupa Valley and Perris, where a combined 8 million square feet is on tap for completion. While a consistent number of 200,000-square-foot-plus lease commitments were executed across these four cities over the past two years, the upcoming group of larger speculative additions in these areas may struggle to secure tenants near term as logistics providers, wholesalers and suppliers reassess their local space needs. This dynamic will play a notable role in the metro recording the third-largest vacancy increase among major U.S. markets this year. Longer term, however, the Inland Empire remains well positioned due to its essential role in both the Southern California and national supply chains.