inland empire - air cre · the inland empire industrial market closed out the fourth quarter of...

2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved

INDUSTRIAL MARKET REPORT

Inland Empire 4th Quarter 2016

Produced in partnership with


2

Table of Contents and Methodology/Map 2-3

Market Overview 4-5

Statistics by Market 6

Vacancy Rates & Asking Rates 7-8

Leasing & Absorption 9

New Construction 10

Industrial Advisory Board Members 11

Xceligent Team 12

The Inland Empire tracked set consists of an inventory of buildings considered to be competitive by

Xceligent is a leading provider of verified commercial real estate information which assists real estate

professionals, appraisers, owners, investors and developers that make strategic decisions to lease, sell,

buy and develop commercial properties.

Table of Contents/

Methodology of Tracked Set

Tracked

Inventory

(Industrial)

The total square feet (sf) of all existing single and multi tenant industrial properties greater

than 10,000 sf. Flex/R&D buildings with an office build out greater than 30% and a parking

ratio greater than 3:1,000 are excluded.

Direct vacant (sf) The total of the vacant square footage in a building that is being marketed by an agent

representing the landlord.

Net Absorption The net change in physically occupied space from quarter to quarter, expressed in square

feet.

Sublease (sf) Space that is offered for lease by a current tenant, or his agent, within a property. Whether

the tenant is paying rent or not, the space is considered vacant only if it is unoccupied.

Total Available

(sf)

All of the available leasable space within a building, whether it is occupied or vacant, for

direct lease or sublease space.

Total Vacant (sf) The total of all of the vacant square footage within a building, including both direct and

sublease space.


3

Industrial Market Map


4

Overview

Inland Empire Industrial Overview

The Inland Empire industrial market closed out the fourth quarter of 2016 with 2,884,724 square feet (sf) of positive net absorption and 9,398,069 sf year-to-date.

At 3.5%, the Inland Empire vacancy rate is slightly higher than the 3.2% reported in the fourth quarter of 2015. Despite a slight uptick, 19.6 million sf was delivered in 2016. Of this, 11.4 million sf has already been absorbed.

Development activity continues to thrive with 21.2 million sf of new construction underway.

With the largest lease of the quarter, Bob’s Discount Furniture occupied 806,322 sf at the San Bernardino Logistics Center.

# of Bldgs Inventory (sf) Total Available (sf) Total Vacant (sf) Total Vacancy Rate

(%) Total Quarterly Net

Absorption (sf) YTD Total Net Absorption (sf)

Inland Empire East 2,816 219,478,285 17,893,534 12,518,778 5.7% 1,289,368 7,690,306

Whse/Mfg Class A 438 114,888,403 14,350,356 11,004,732 9.6% 1,413,681 6,554,737

Whse/Mfg Class B 1,231 70,371,771 2,267,394 1,108,311 1.6% -179,695 336,872

Whse/Mfg Class C 1,147 34,218,111 1,275,784 405,735 1.2% 55,382 798,697

Inland Empire West 3,487 283,073,971 12,538,517 4,997,234 1.8% 1,595,356 1,707,763

Whse/Mfg Class A 649 112,189,661 6,703,148 3,027,965 2.7% 899,356 1,483,910

Whse/Mfg Class B 2,056 147,618,191 5,238,131 1,747,834 1.2% 685,596 -2,459

Whse/Mfg Class C 782 23,266,119 597,238 221,435 1.0% 10,404 226,312

Overall 6,303 502,552,256 30,432,051 17,516,012 3.5% 2,884,724 9,398,069

# of Bldgs Inventory (sf) Direct Available

(sf) Direct Vacant (sf)

Direct Vacancy Rate (%)

Direct Quarterly Net Absorption (sf)

YTD Direct Net Absorption (sf)

Inland Empire East 2,816 219,478,285 16,486,336 12,199,247 5.6% 1,591,759 7,706,672

Whse/Mfg Class A 438 114,888,403 13,557,555 10,785,924 9.4% 1,632,489 6,612,750

Whse/Mfg Class B 1,231 70,371,771 1,995,225 1,007,588 1.4% -96,112 309,423

Whse/Mfg Class C 1,147 34,218,111 933,556 405,735 1.2% 55,382 784,499

Inland Empire West 3,487 283,073,971 10,478,672 4,964,044 1.8% 1,602,447 1,604,497

Whse/Mfg Class A 649 112,189,661 4,915,078 3,027,965 2.7% 899,356 1,483,910

Whse/Mfg Class B 2,056 147,618,191 4,966,356 1,714,644 1.2% 695,386 -105,725

Whse/Mfg Class C 782 23,266,119 597,238 221,435 1.0% 7,705 226,312

Overall 6,303 502,552,256 26,965,008 17,163,291 3.4% 3,194,206 9,311,169

# of Bldgs Inventory (sf) Available Sublease

(sf) Sublease Vacant

(sf) Sublease Vacancy

Rate (%) Sublease Quarterly

Absorption (sf) YTD Sublease Net

Absorption (sf)

Inland Empire East 2,816 219,478,285 1,407,198 319,531 0.1% -302,391 -16,366

Whse/Mfg Class A 438 114,888,403 792,801 218,808 0.2% -218,808 -58,013

Whse/Mfg Class B 1,231 70,371,771 272,169 100,723 0.1% -83,583 27,449

Whse/Mfg Class C 1,147 34,218,111 342,228 - 0.0% 0 14,198

Inland Empire West 3,487 283,073,971 2,059,845 33,190 0.0% -7,091 103,266

Whse/Mfg Class A 649 112,189,661 1,788,070 - 0.0% 0 0

Whse/Mfg Class B 2,056 147,618,191 271,775 33,190 0.0% -9,790 103,266

Whse/Mfg Class C 782 23,266,119 - - 0.0% 2,699 0

Overall 6,303 502,552,256 3,467,043 352,721 0.1% (309,482) 86,900


5

Inland Empire Industrial Overview

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016

Historical Vacancy Rate & Net Absorption

Absorption Vacancy

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016

Historical Vacancy Rates by Class

Whse/Mfg Class A Whse/Mfg Class B Whse/Mfg Class C

(500,000)

500,000

1,500,000

2,500,000

3,500,000

4,500,000

5,500,000

6,500,000

4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016

Historical Net Absorption by ClassWhse/Mfg Class A Whse/Mfg Class B Whse/Mfg Class C


6

Statistics by Market

# of Bldgs Inventory (sf) Total

Vacant (sf) Sublease

Vacant (sf) Vacancy Rate (%)

Total Quarterly Absorption (sf)

YTD Total Net Absorption (sf)

Inland Empire East 2,816 219,478,285 12,518,778 319,531 5.7% 1,289,368 7,690,306

10,000 - 24,999 sf 1,468 23,106,662 300,400 0 1.3% 65,364 287,129

25,000 - 49,999 sf 604 21,015,302 365,823 0 1.7% 150,276 194,597

50,000 - 99,999 sf 334 22,782,132 802,360 22,500 3.5% -145,681 -325,282

100,000 - 249,999 sf 218 32,220,672 918,997 297,031 2.9% -327,431 692,383

250,000 - 499,999 sf 87 32,206,206 3,155,745 0 9.8% 86,321 1,701,883

500,000 - 749,999 sf 51 31,604,868 3,836,304 0 12.1% 654,197 2,127,632

Greater than 750,000 sf 54 56,542,443 3,139,149 0 5.6% 806,322 3,011,964

Inland Empire West 3,487 283,073,971 4,997,234 33,190 1.8% 1,595,356 1,707,763

10,000 - 24,999 sf 1,654 25,704,732 198,525 0 0.8% 66,720 136,029

25,000 - 49,999 sf 711 24,592,378 569,838 33,190 2.3% -55,419 -31,511

50,000 - 99,999 sf 411 28,651,801 236,344 0 0.8% 163,415 157,120

100,000 - 249,999 sf 415 62,964,359 1,021,132 0 1.6% 101,911 350,591

250,000 - 499,999 sf 204 73,068,701 1,333,341 0 1.8% 702,178 1,176,319

500,000 - 749,999 sf 55 33,515,231 900,442 0 2.7% 616,551 307,345

Greater than 750,000 sf 37 34,576,769 737,612 0 2.1% 0 -388,130

Overall 6,303 502,552,256 17,516,012 352,721 3.5% 2,884,724 9,398,069


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Vacancy Rates & Asking Rates

Vacancy Rate % Weighted Average Asking Rent (NNN)

4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016

Inland Empire East 5.6% 5.7% 5.7% 6.0% 5.7% $0.44 $0.41 $0.45 $0.46 $0.48

Whse/Mfg Class A 8.8% 9.1% 9.0% 10.3% 9.6% $0.40 $0.39 $0.39 $0.42 $0.42

Whse/Mfg Class B 2.0% 1.3% 1.6% 1.3% 1.6% $0.45 $0.44 $0.48 $0.49 $0.52

Whse/Mfg Class C 3.5% 4.0% 3.3% 1.3% 1.2% $0.97 $0.41 $0.85 $0.83 $0.72

Inland Empire West 1.3% 1.7% 1.1% 2.2% 1.8% $0.51 $0.55 $0.59 $0.60 $0.59

Whse/Mfg Class A 1.3% 2.4% 0.8% 3.1% 2.7% $0.49 $0.53 $0.53 $0.53 $0.55

Whse/Mfg Class B 1.2% 1.1% 1.1% 1.6% 1.2% $0.55 $0.54 $0.60 $0.60 $0.63

Whse/Mfg Class C 1.9% 2.5% 2.3% 1.0% 1.0% $0.50 $0.59 $0.79 $0.79 $1.00

Overall 3.2% 3.4% 3.1% 3.8% 3.5% $0.47 $0.45 $0.51 $0.51 $0.51


8

Vacancy Rates & Asking Rates

5.7%

1.8%

Inland Empire East Inland Empire West

Vacancy Rate by Market

$0.48

$0.59


Weighted Average Asking Rent by Market (NNN)

$0.31

$0.43

$0.65 $0.65

$1.00 $1.00

$0.45

$0.56

$0.73

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

Whse/Mfg Class A Whse/Mfg Class B Whse/Mfg Class C

Asking Rent Range by Class (NNN)


9

Leasing & Absorption

Largest Leases & Absorption Changes

Property Name Occupied or Vacated (sf)

Tenant Name Submarket Specific Use

6227 Cajon Blvd, San Bernardino 806,322 Bob's Discount Furniture Inland Empire East Whse/Mfg Class A

13053 San Bernardino Ave, Fontana 616,551 Ozburn-Hessey Logistics Inland Empire West Whse/Mfg Class A

1590 N Tamarind Ave, Rialto 543,400 XPO Logistics, Inc. Inland Empire East Whse/Mfg Class A

27573 River Bluff Ave, Redlands 542,977 Burlington Coat Factory Inland Empire East Whse/Mfg Class A

11250 Poplar Ave, Fontana 444,669 Go Plus, Inc. Inland Empire West Whse/Mfg Class A

13521 Santa Ana Ave, Fontana 423,460 DCG Fulfillment Inland Empire West Whse/Mfg Class B

2415 N Locust Ave, Rialto 401,914 The Hillman Group Inland Empire East Whse/Mfg Class A

2255 W San Bernardino Ave, Redlands -207,114 KPower Global Logistics Inland Empire East Whse/Mfg Class A

3392 Mike Daley Dr, San Bernardino -218,808 ES3 Inland Empire East Whse/Mfg Class A

13366 Philadelphia St, Fontana -266,950 Harman International Industries, Inc. Inland Empire West Whse/Mfg Class B

9050 Hermosa Ave, Rancho Cucamonga -468,682 Amaxi Foods Inland Empire West Whse/Mfg Class A

Top Transactions

Property Name Sale Price Sold (sf) Buyer Seller Submarket Specific Use

6227 Cajon Blvd, San Bernardino $68,537,370 806,322 Waterstone Northeast

TIAA CREF Inland Empire East Whse/Mfg Class A

12320 4th St, Rancho Cucamonga $24,400,000 283,792 Rexford Industrial Allen Commercial Realty Ltd

Inland Empire West Whse/Mfg Class B

1730 Eastridge Ave, Riverside $17,923,500 115,400 Calavo Growers Inc Campus Opco LLC and Fresh Foods LLC

Inland Empire East Whse/Mfg Class A


10

New Construction

11,502,316

9,787,527

8,500,000

9,000,000

9,500,000

10,000,000

10,500,000

11,000,000

11,500,000

12,000,000


Current Construction by Market


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Industrial Advisory Board Members

Inland Empire

CBRE Dave Consani

Jim Koenig

Colliers International Mark Zorn

Josh Hayes

Daum Commercial Rick John

Gus Andros

JLL Mike McCrary

Ruben Goodsell

Patrick Wood

Lee & Associates Michael Chavez

Majestic Realty Co Kyle Valley

NAI Capital Nick Chang

NGKF Mark Kegans

Ron Washle

Strata Realty Tim Hawke

Voit Walt Chenoweth


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This information has been obtained from sources believed reliable. While we do not doubt its accuracy, we

have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to

independently confirm its accuracy. For more information, please contact :

Matt Nelson Director of Analytics 714-509-1404 [email protected]

Monique Ebel Director of Research 714-538-8432 [email protected]

Sean Pullin Sales Executive 714-855-5801 [email protected]

Tim Hayes Executive Director - AIR 213-687-8777 [email protected]

Michael Foxworthy VP of National Accounts 805-807-6291 [email protected]

Brad Hauser VP of Analytics - Western Region 281-782-3944 [email protected]

Xceligent Inland Empire Team

Produced in partnership with

mailto:[email protected]






inland empire - air cre · the inland empire industrial market closed out the fourth quarter of...

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