Inland Empire Saw Strong Industrial Deals in 2025
Sales and leasing activity remain key drivers of this market's performance, according to Yardi Matrix.
The Inland Empire’s industrial market closed 2025 between highs and lows, according to Yardi Matrix data.
Investment volume held steady, supported by the highest prices among peer markets. On the flip side, construction levels lagged national averages, placing the market among the slower-growing ones.
Industrial deliveries declined sharply from last year’s pace but continued to slightly surpass national norms. Meanwhile, vacancies remained below the U.S. average as leasing activity continued across large-format facilities.
Investment volume holds steady, prices stay high
The Inland Empire recorded nearly $2 billion in industrial investment volume last year. A total of 81 properties encompassing nearly 10.3 million square feet changed hands. Sales activity recorded a 20 percent drop from the one registered in 2024, when the metro logged $2.5 billion in transactions across 11.1 million square feet.
Average pricing reached $230 per square foot, the highest among peers. Phoenix ($169 per square foot), Atlanta ($131 per square foot) and Philadelphia ($129 per square foot) followed, while Indianapolis ($92 per square foot) and Kansas City ($83 per square foot) posted even lower averages.
In November, Bridge Logistics Properties purchased a 1.1 million-square-foot asset in Fontana, Calif., in one of the Inland Empire’s largest transactions of the year. The property, part of the 4.8 million-square-foot Sierra Business Park, commanded $174 million.
And in December, a fund backed by Brookfield Properties sold a 525,756-square-foot warehouse in San Bernardino, Calif., to Overton Moore Properties for more than $120 million. The Class A property at 890 E. Mill St. was built in 2002 and features cross-dock design, 30-foot clear heights, 192 dock-high doors, full air conditioning and 575 vehicle parking spaces.
Construction activity remains limited
At the end of December, 18 industrial facilities totaling 6.9 million square feet were under construction in the Inland Empire, accounting for 1 percent of total stock—well below the 1.7 percent national average.
The metro ranked in the bottom half of the peer markets, alongside Philadelphia (3.8 million square feet) and Kansas City (3 million square feet). Phoenix (19.9 million square feet), Chicago (13 million square feet) and Indianapolis (7.4 million square feet) had the largest construction pipelines as of December.
In August, Newcastle Partners broke ground on Mesa Linda Logistics Center, a 406,138-square-foot Class A speculative building in Hesperia, Calif. Scheduled for delivery in the second quarter of this year, the facility rises on an approximately 18-acre site at 9260 Mesa Linda St., providing direct access to Interstate 15. Newcastle secured $27.5 million in construction financing from Bank OZK for this development.
Deliveries down from 2024 levels
Nearly 11 million square feet of industrial space delivered across 30 properties in the Inland Empire in 2025, accounting for 1.6 percent of total stock and slightly exceeding the 1.5 percent national average. The volume declined significantly from the previous year, when 79 properties totaling 22.2 million square feet came online.
Several peer markets posted higher delivery totals in 2025, such as Phoenix (18 million square feet), Kansas City (13.6 million square feet) and Philadelphia (13.6 million square feet). Indianapolis, with only 2 million square feet in completions, was at the other end of the spectrum.
Last year’s noteworthy deliveries in the Inland Empire included Buildings 1 and 2 of Speedway Commerce Center, a 6.6 million-square-foot logistics development underway in Fontana, Calif. The facilities totaling more than 1.8 million square feet are LEED Gold-certified. The multi-building campus developed by a CBRE Investment Management fund and Hillwood Investment Properties is the beneficiary of a $756 million financing package.
Vacancy remains below national average
The Inland Empire’s industrial vacancy rate stood at 8.4 percent at the end of December, below the 9.2 percent national average. The index was slightly higher than the one recorded 12 months prior, when it measured 7.8 percent.
Among similar markets, Kansas City ranked first for vacancies (4.8 percent, also the smallest value in the U.S.), followed by Philadelphia industrial space vacancy (8.0 percent). Indianapolis (8.7 percent) and Chicago (12.4 percent) recorded the largest values.
The Inland Empire also witnessed one of the highest rent growths in the U.S., at 6.4 percent year-over-year as of December. The market was second among peers after Philadelphia (6.7 percent).
In August, third-party logistics firm iDC Logistics expanded its footprint in the Inland Empire with two leases totaling more than 1.1 million square feet.
The largest deal involved 844,311 square feet of Class A space at 5690 Industrial Parkway in San Bernardino, Calif., owned by Alere Property Group, according to Yardi Matrix data. A second lease covered 260,000 square feet at Fairway Industrial Park, 19515 E. Walnut Drive N., in the City of Industry, Calif., which is set to operate as a manufacturing hub producing computers and monitors for a third-party client.
You must be logged in to post a comment.