Riverside-San Bernardino Retail Market Report

Inland Empire’s modest national standing somewhat deceiving. The metro entered the second half of 2023 with one of the nation’s highest retail vacancy rates; however, by its own historical standards the sector is in a position of strength. As of June, the volume of space available for lease was well below the year-end 2019 mark, despite the addition of 2.6 million square feet during that stretch. Positive net absorption over each of the past 10 quarters is to credit. During this interval, demand more than tripled new supply, with leasing activity strong across segments. Specifically, single- and multi-tenant vacancy rates declined by 210 and 180 basis points, respectively. Local population growth is catalyzing retailer expansions, with the addition of 150,000 residents over the next five years expected to support other tenant growth, preserving strong fundamentals.