A softening market in Southern California's Inland Empire is producing a bevy of large leasing deals.
The vacancy rate in the two-county market, which stretches from the city limits of Los Angeles to the Arizona border, hit 5.9% in the first quarter-the seventh consecutive quarter of increased vacancy in Inland Empire, which in the middle of 2022 had a vacancy rate that was too low to measure.
Net absorption finally gave way to an onslaught of new supply, turning sharply negative with absorption totaling minus 964K SF in Inland Empire in Q1 2024—a swing of more than 1M SF from positive absorption totaling 1.67M SF in Q4 2023—while sublease space increased to 18.5M, with more than 80% of sublease availability located in warehouses larger than 250K SF, according to a new market report from CBRE.
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