3PL Tenants Dominate Big-Box Warehouse Leases in Inland Empire

Third-party logistics (3PL) providers leased the most big-box warehouse space in the Inland Empire, completing 58.6% of all transactions in 2023, the highest of any market, CBRE said in a new report. The region continues to be one of the most in-demand big-box markets, with leasing volume exceeding 30 million square feet for four consecutive years.

“The themes of rightsizing and streamlining supply chains, efficiency, flexibility and value stand out in this environment,” said Ian Britton, senior managing director at CBRE. “Companies seem more willing to outsource and utilize 3PL providers to avoid hiring their labor force, expensive set-up costs and capital investment in material handling, technology and automation.”

He added, “At the end of the day, it is about reducing delivery times to customers by using a 3PL network of strategic locations to access Southern California’s 24 million people as soon as possible.”

More space became available in the IE due to completed construction and tenant move-outs, increasing the overall vacancy rate to 3.7% in 2023. However, that is still fourth lowest in the CBRE report behind Mexico City, Los Angeles County and Nashville.