Inland Empire: demand soft, pipeline active

The Inland Empire’s warehouse market got looser in the first quarter of 2026, even as developers kept adding new projects across Menifee, Perris and the High Desert. (savills.com) Savills said vacancy reached 9.9 percent in Q1 2026, up 80 basis points from the prior quarter, after four tenants with more than 1 million square feet each vacated space. The largest move-out was Keeco’s 1.3 million-square-foot exit in Moreno Valley. (savills.com) Colliers put the quarter’s vacancy rate at 8.1 percent and said net absorption was the third-lowest on record, with four 1 million-square-foot buildings going vacant in a single quarter for the first time. Colliers also said average asking rents fell $0.04 quarter over quarter and are down $0.64 from their Q2 2023 peak. (colliers.com) CBRE’s Inland Empire core report showed the same pattern: vacancy rose to 7.8 percent in Q1 2026, while net absorption turned negative because of large move-outs in buildings 500,000 square feet and larger. At the same time, tenants still signed 13.6 million square feet of new leases, up 40.2 percent from Q4 2025. (cbre.com) That split has left brokers describing a market with weaker occupancy but active dealmaking, especially as pandemic-era leases begin to expire. Savills said occupiers that delayed decisions because of economic uncertainty and tariff-cost shifts are now being pushed into renewals or relocations by lease deadlines. (savills.com) Developers have not stopped building. The Registry reported on April 15 that five major industrial projects totaling more than 6.6 million square feet are moving ahead in the Inland Empire despite elevated vacancy. (theregistrysocal.com) The biggest of those is Menifee Valley Business Park, a planned five-building project at Highway 74 and Menifee Road totaling 4,663,912 square feet, according to marketing materials from the project site and CBRE. The park is being offered for lease as a large-format industrial campus. (menifeevalleybp.com ) (cbre.com) In the High Desert, Lewis Retail Centers says High Desert Gateway includes a 2.5 million-square-foot warehouse now under construction in Hesperia, and Newcastle Partners has financing for the 408,997-square-foot Mesa Linda Logistics Center there. In Perris, Newcastle also secured a $65.1 million construction loan for the 631,011-square-foot Ellis Avenue Logistics Center. (lewisretailcenters.com) (commercialsearch.com) (traded.co) The pipeline is smaller than it was a year ago, but it is still large enough to keep pressure on landlords trying to fill big-box space. Colliers said construction stayed below 5 million square feet in Q1 2026, while CBRE counted 854,000 square feet of new groundbreakings in the quarter after none in late 2025. (colliers.com) (cbre.com) For now, the Inland Empire is still doing what made it the region’s warehouse hub: signing leases, delivering buildings and searching for replacement tenants at scale. The next few quarters will show whether that leasing volume is enough to absorb the million-square-foot vacancies that opened at the start of 2026. (cbre.com) (savills.com)