Inland Empire, CA Industrial Market Report Q3 2026

New Supply Falls 48% and Demand Flips Back to Positive

Demand

Inland Empire absorbed 4.70M SF in Q3 2026, against -1.02M SF in the same quarter last year. Vacancy is 8.7%, 10 bps tighter than Q3 2025. Twentynine Palms is the tightest submarket at 0.0% vacancy; Coachella Valley leads rent growth at +0.4%. Trailing-12-month absorption of 6.13M SF is up from 5.93M SF a year earlier. Asking rent of $12.30/SF is down 0.7% year over year and 7.3% below the Q3 2023 peak of $13.27/SF.

Supply

Inland Empire delivered 1.65M SF in Q3 and 7.36M SF over the trailing twelve months (-48% versus the prior TTM period). Space under construction equals 1.8% of inventory, concentrated in Mojave River Valley at 7.5% of its stock. Annual deliveries peaked at 33.98M SF in 2006. Q3 deliveries were less than half of last year’s 6.03M SF. The 14.07M SF pipeline equals about nine quarters of absorption at the trailing pace.

Investment Market

Inland Empire recorded $5.4B in sales over the trailing twelve months, +36% against the prior TTM period; Q3 accounted for $1.69B. The high-water mark in this series is $8.3B in 2022.

Inland Empire cap rates average 5.18%, up for 18 straight quarters. Pricing sits at $248/SF, lower for 3 consecutive years. The cap rate is 103 bps above the Q1 2022 low of 4.14%.