It wasn't always like this in the Inland Empire. Back in 2008, the industrial vacancy rate in the region was above 10%—but a lot has happened in the last 14 years. The acceleration of ecommerce, increased capacity at the San Pedro Port Complex and a global pandemic that disrupted global supply chains and amplified demand for online shopping have all contributed to booming industrial demand. As a result, nearly all of the supply in the Inland Empire has bee absorbed.

According to the most recent industrial report from JLL, the Inland Empire has a vacancy rate of only .4%. In the first quarter, net absorption totaled 2.8 million square feet and leasing activity totaled 10.9 million square feet. The limited availability of space is wearing on the sector. The quarter marked the lowest leasing activity in the market in three years. The decrease in activity is the direct result of a lack of move-in-ready supply, certainly not demand.

The development community is hurrying to ramp up production to meet demand. The construction pipeline grew 11.2% in the first quarter alone to mor than 30 million square feet. However, the availability of developable land is the biggest challenge for new construction projects, and as a result, developers are breaking ground in untested areas of the market, according to the report. Most of the sizable new projects ate taking place in the northern, eastern and southern most borders of the Inland Empire.