Record Low Vacancies and High Leasing End Year in IE

Despite recent job growth, the Inland Empire lost 108,000 jobs last year and is still recovering from the economic impact of COVID-19. Meanwhile, the exponential growth of e-commerce sales boosted imports from Asia to a two-year high. The Port of Long Beach posted a 6.4% annual increase in import volume in 2020 while Port of LA’s imports grew by 2.4%, according to a fourth-quarter report by Cushman & Wakefield.

As the U.S. economy has partially rebounded from the first half of 2020, IE leasing velocity has grown in tandem due to the expansion of e-commerce demand amid the pandemic. By year-end 2020, the IE posted 48.3 million square feet of new industrial leasing activity, a record high and up 19.2% from last year.

At year-end, the IE posted 21.1 million square feet of overall net absorption. Overall, the IE delivered 20.9 million square feet of new inventory throughout 2020, down 11.1% from the previous year. With the pause in construction starts in the first half of the year, the IE had 18.2 million square feet under construction at year-end, down 14.3% from 2019’s year-end total of 21.2 million square feet.

Nearly a year into the pandemic, rents remained relatively stable throughout 2020. The overall asking rate averaged $0.74 per square foot per month for an annual growth rate of 1.9%.

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