IE Industrial Hit Record Low of 2.4% Vacancy in Q1

The industrial sector was already experiencing a shift in supply chain activity prior to COVID-19, and e-commerce increased the need for technological advancements in order to meet the growing demand for last-mile distribution. Indeed, cold storage warehouse development has been steady, with the delivery of approximately 24 million square feet of new inventory in each decade since the 1990s, according to Newmark research.

Notably, more than two-thirds of the new inventory from the 2010s was delivered after 2015, with approximately 15 million square feet completed in the past five years. Illinois, California and Texas have led the nation in development during that period.

The Inland Empire industrial market’s robust leasing activity from the last nine months of 2020 carried over into early 2021, according to Newmark research. The vacancy rate hit a record low of 2.4 percent in first quarter 2021, with the asking rent notching a new high of $0.73. Construction activity was up 36.2 percent from year-end 2020.