Q1 2025 Inland Empire Multifamily Market Report
The Inland Empire multifamily market posted steady performance in Q1 2025, with 1.2% rent growth and over 3,000 units absorbed in 2024—one of the highest levels in two decades. Despite new supply, vacancy held at 6.2%, supported by in-migration from Los Angeles and strong Class A demand. Key submarkets like Temecula, Fontana, and Moreno Valley are seeing active development across multifamily, industrial, and retail sectors.
Inland Empire Multifamily By the Numbers
Rent Growth: 1.2%
Average Rent/Unit: $2,103
Vacancy Rate: 6.2%
Units Under Construction: 4,386
(Source: CoStar Group, Inc.)
Robust Apartment Demand
- Over 3,000 units absorbed in 2024—one of the highest annual absorption levels in two decades.
- Class A product led the surge, with 811 units absorbed.
Stable Fundamentals Amid Deliveries
- Despite elevated new supply, vacancy rates remained stable.
- Demand driven by in-migration from Los Angeles residents seeking more affordable rentals.
- Most new developments are being added in the Southwest Riverside County/Temecula submarket, with 600 units on the way that will deliver throughout the next few years.
Demand Drivers
Standout Lease Activity
- While retail performance slowed down in 2024, grocery stores accounted for the top activity across the market. Throughout 2024, supermarket tenants took on eight new leases for properties over 20,000 square feet each.
- Industrial construction has mostly targeted the Airport Area submarket, which includes Ontario, Rancho Cucamonga, and Fontana. Additionally, leasing activity has been strong here with Amazon, Home Depot, and Samsung Electronics signing leases over 80,000 square feet.
Latest Developments
- Most vacant retail locations in South Riverside County are for smaller properties inside shopping centers, which are already catching the eye of pad site tenants. Pad site tenants have also been drawn to the Highland submarket, specifically the incoming Greenspot Crossings shopping center. Tenants like Chipotle and Starbucks have already pre-leased space here.
- Pendry and Montage La Quinta are two luxury hotels scheduled for completion in April 2025, which will add 200 and 134 rooms, respectively, to the Palm Springs submarket upon delivery. The new developments will feature an 18-hole golf course, a 70,000-square-foot conference center, and spa facilities in each hotel.
- Phase 1 of the Speedway Commerce Center in Fontana is scheduled for completion in June 2025. This phase includes two new buildings that will total 1.8 million square feet upon delivery. The new center will feature 242 trailer parking spots, and boasts proximity to both Ontario and San Bernardino airports.
- The World Logistics Center boasts more than 100 million square feet of land, and it is located in Moreno Valley. It is scheduled for completion in 2030, and will further strengthen the Inland Empire‘s rank as a top industrial hub. The center will provide convenient access to major U.S. markets with its proximity to major interstates.
