How Low Can IE Industrial Vacancy Go?

Industrial vacancy remains low, under 5 percent in all submarkets, despite strong development activity and new buildings being delivered to the market, according to Lee & Associates’ second quarter 2021 Inland Empire industrial market report for the East Valley market.

Vacancy rates decreased in second quarter 2021 to 1.24 percent. In 2021, the vacancy rate is projected to show an overall stable rate, although it may rise slightly given a projected increase in new supply. Warehouse and distribution space continues to be in high demand and new construction is expected to be absorbed quickly.

The base for second quarter 2021 represented 14.3 million square feet under construction with 90.7 percent of the total in the 100,000-plus-square-foot range, a 3.6 percent increase from the previous quarter. There were 10 new buildings that completed construction in the East Valley in second quarter encompassing 1.5 million square feet, with 24 new buildings projected to be completed in the third quarter 2021 totaling 4.2 million square feet, says the report.