2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved INDUSTRIAL MARKET REPORT Inland Empire 4th Quarter 2016 Produced in partnership with
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
INDUSTRIAL MARKET REPORT
Inland Empire 4th Quarter 2016
Produced in partnership with
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
2
Table of Contents and Methodology/Map 2-3
Market Overview 4-5
Statistics by Market 6
Vacancy Rates & Asking Rates 7-8
Leasing & Absorption 9
New Construction 10
Industrial Advisory Board Members 11
Xceligent Team 12
The Inland Empire tracked set consists of an inventory of buildings considered to be competitive by
Xceligent is a leading provider of verified commercial real estate information which assists real estate
professionals, appraisers, owners, investors and developers that make strategic decisions to lease, sell,
buy and develop commercial properties.
Table of Contents/
Methodology of Tracked Set
Tracked
Inventory
(Industrial)
The total square feet (sf) of all existing single and multi tenant industrial properties greater
than 10,000 sf. Flex/R&D buildings with an office build out greater than 30% and a parking
ratio greater than 3:1,000 are excluded.
Direct vacant (sf) The total of the vacant square footage in a building that is being marketed by an agent
representing the landlord.
Net Absorption The net change in physically occupied space from quarter to quarter, expressed in square
feet.
Sublease (sf) Space that is offered for lease by a current tenant, or his agent, within a property. Whether
the tenant is paying rent or not, the space is considered vacant only if it is unoccupied.
Total Available
(sf)
All of the available leasable space within a building, whether it is occupied or vacant, for
direct lease or sublease space.
Total Vacant (sf) The total of all of the vacant square footage within a building, including both direct and
sublease space.
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Industrial Market Map
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
4
Overview
Inland Empire Industrial Overview
The Inland Empire industrial market closed out the fourth quarter of 2016 with 2,884,724 square feet (sf) of positive net absorption and 9,398,069 sf year-to-date.
At 3.5%, the Inland Empire vacancy rate is slightly higher than the 3.2% reported in the fourth quarter of 2015. Despite a slight uptick, 19.6 million sf was delivered in 2016. Of this, 11.4 million sf has already been absorbed.
Development activity continues to thrive with 21.2 million sf of new construction underway.
With the largest lease of the quarter, Bob’s Discount Furniture occupied 806,322 sf at the San Bernardino Logistics Center.
# of Bldgs Inventory (sf) Total Available (sf) Total Vacant (sf) Total Vacancy Rate
(%) Total Quarterly Net
Absorption (sf) YTD Total Net Absorption (sf)
Inland Empire East 2,816 219,478,285 17,893,534 12,518,778 5.7% 1,289,368 7,690,306
Whse/Mfg Class A 438 114,888,403 14,350,356 11,004,732 9.6% 1,413,681 6,554,737
Whse/Mfg Class B 1,231 70,371,771 2,267,394 1,108,311 1.6% -179,695 336,872
Whse/Mfg Class C 1,147 34,218,111 1,275,784 405,735 1.2% 55,382 798,697
Inland Empire West 3,487 283,073,971 12,538,517 4,997,234 1.8% 1,595,356 1,707,763
Whse/Mfg Class A 649 112,189,661 6,703,148 3,027,965 2.7% 899,356 1,483,910
Whse/Mfg Class B 2,056 147,618,191 5,238,131 1,747,834 1.2% 685,596 -2,459
Whse/Mfg Class C 782 23,266,119 597,238 221,435 1.0% 10,404 226,312
Overall 6,303 502,552,256 30,432,051 17,516,012 3.5% 2,884,724 9,398,069
# of Bldgs Inventory (sf) Direct Available
(sf) Direct Vacant (sf)
Direct Vacancy Rate (%)
Direct Quarterly Net Absorption (sf)
YTD Direct Net Absorption (sf)
Inland Empire East 2,816 219,478,285 16,486,336 12,199,247 5.6% 1,591,759 7,706,672
Whse/Mfg Class A 438 114,888,403 13,557,555 10,785,924 9.4% 1,632,489 6,612,750
Whse/Mfg Class B 1,231 70,371,771 1,995,225 1,007,588 1.4% -96,112 309,423
Whse/Mfg Class C 1,147 34,218,111 933,556 405,735 1.2% 55,382 784,499
Inland Empire West 3,487 283,073,971 10,478,672 4,964,044 1.8% 1,602,447 1,604,497
Whse/Mfg Class A 649 112,189,661 4,915,078 3,027,965 2.7% 899,356 1,483,910
Whse/Mfg Class B 2,056 147,618,191 4,966,356 1,714,644 1.2% 695,386 -105,725
Whse/Mfg Class C 782 23,266,119 597,238 221,435 1.0% 7,705 226,312
Overall 6,303 502,552,256 26,965,008 17,163,291 3.4% 3,194,206 9,311,169
# of Bldgs Inventory (sf) Available Sublease
(sf) Sublease Vacant
(sf) Sublease Vacancy
Rate (%) Sublease Quarterly
Absorption (sf) YTD Sublease Net
Absorption (sf)
Inland Empire East 2,816 219,478,285 1,407,198 319,531 0.1% -302,391 -16,366
Whse/Mfg Class A 438 114,888,403 792,801 218,808 0.2% -218,808 -58,013
Whse/Mfg Class B 1,231 70,371,771 272,169 100,723 0.1% -83,583 27,449
Whse/Mfg Class C 1,147 34,218,111 342,228 - 0.0% 0 14,198
Inland Empire West 3,487 283,073,971 2,059,845 33,190 0.0% -7,091 103,266
Whse/Mfg Class A 649 112,189,661 1,788,070 - 0.0% 0 0
Whse/Mfg Class B 2,056 147,618,191 271,775 33,190 0.0% -9,790 103,266
Whse/Mfg Class C 782 23,266,119 - - 0.0% 2,699 0
Overall 6,303 502,552,256 3,467,043 352,721 0.1% (309,482) 86,900
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Inland Empire Industrial Overview
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016
Historical Vacancy Rate & Net Absorption
Absorption Vacancy
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016
Historical Vacancy Rates by Class
Whse/Mfg Class A Whse/Mfg Class B Whse/Mfg Class C
(500,000)
500,000
1,500,000
2,500,000
3,500,000
4,500,000
5,500,000
6,500,000
4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016
Historical Net Absorption by ClassWhse/Mfg Class A Whse/Mfg Class B Whse/Mfg Class C
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Statistics by Market
# of Bldgs Inventory (sf) Total
Vacant (sf) Sublease
Vacant (sf) Vacancy Rate (%)
Total Quarterly Absorption (sf)
YTD Total Net Absorption (sf)
Inland Empire East 2,816 219,478,285 12,518,778 319,531 5.7% 1,289,368 7,690,306
10,000 - 24,999 sf 1,468 23,106,662 300,400 0 1.3% 65,364 287,129
25,000 - 49,999 sf 604 21,015,302 365,823 0 1.7% 150,276 194,597
50,000 - 99,999 sf 334 22,782,132 802,360 22,500 3.5% -145,681 -325,282
100,000 - 249,999 sf 218 32,220,672 918,997 297,031 2.9% -327,431 692,383
250,000 - 499,999 sf 87 32,206,206 3,155,745 0 9.8% 86,321 1,701,883
500,000 - 749,999 sf 51 31,604,868 3,836,304 0 12.1% 654,197 2,127,632
Greater than 750,000 sf 54 56,542,443 3,139,149 0 5.6% 806,322 3,011,964
Inland Empire West 3,487 283,073,971 4,997,234 33,190 1.8% 1,595,356 1,707,763
10,000 - 24,999 sf 1,654 25,704,732 198,525 0 0.8% 66,720 136,029
25,000 - 49,999 sf 711 24,592,378 569,838 33,190 2.3% -55,419 -31,511
50,000 - 99,999 sf 411 28,651,801 236,344 0 0.8% 163,415 157,120
100,000 - 249,999 sf 415 62,964,359 1,021,132 0 1.6% 101,911 350,591
250,000 - 499,999 sf 204 73,068,701 1,333,341 0 1.8% 702,178 1,176,319
500,000 - 749,999 sf 55 33,515,231 900,442 0 2.7% 616,551 307,345
Greater than 750,000 sf 37 34,576,769 737,612 0 2.1% 0 -388,130
Overall 6,303 502,552,256 17,516,012 352,721 3.5% 2,884,724 9,398,069
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Vacancy Rates & Asking Rates
Vacancy Rate % Weighted Average Asking Rent (NNN)
4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016
Inland Empire East 5.6% 5.7% 5.7% 6.0% 5.7% $0.44 $0.41 $0.45 $0.46 $0.48
Whse/Mfg Class A 8.8% 9.1% 9.0% 10.3% 9.6% $0.40 $0.39 $0.39 $0.42 $0.42
Whse/Mfg Class B 2.0% 1.3% 1.6% 1.3% 1.6% $0.45 $0.44 $0.48 $0.49 $0.52
Whse/Mfg Class C 3.5% 4.0% 3.3% 1.3% 1.2% $0.97 $0.41 $0.85 $0.83 $0.72
Inland Empire West 1.3% 1.7% 1.1% 2.2% 1.8% $0.51 $0.55 $0.59 $0.60 $0.59
Whse/Mfg Class A 1.3% 2.4% 0.8% 3.1% 2.7% $0.49 $0.53 $0.53 $0.53 $0.55
Whse/Mfg Class B 1.2% 1.1% 1.1% 1.6% 1.2% $0.55 $0.54 $0.60 $0.60 $0.63
Whse/Mfg Class C 1.9% 2.5% 2.3% 1.0% 1.0% $0.50 $0.59 $0.79 $0.79 $1.00
Overall 3.2% 3.4% 3.1% 3.8% 3.5% $0.47 $0.45 $0.51 $0.51 $0.51
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Vacancy Rates & Asking Rates
5.7%
1.8%
Inland Empire East Inland Empire West
Vacancy Rate by Market
$0.48
$0.59
Inland Empire East Inland Empire West
Weighted Average Asking Rent by Market (NNN)
$0.31
$0.43
$0.65 $0.65
$1.00 $1.00
$0.45
$0.56
$0.73
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
Whse/Mfg Class A Whse/Mfg Class B Whse/Mfg Class C
Asking Rent Range by Class (NNN)
2016 Q4 Market Trends © 2017 by Xceligent, Inc. All Rights Reserved
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Leasing & Absorption
Largest Leases & Absorption Changes
Property Name Occupied or Vacated (sf)
Tenant Name Submarket Specific Use
6227 Cajon Blvd, San Bernardino 806,322 Bob's Discount Furniture Inland Empire East Whse/Mfg Class A
13053 San Bernardino Ave, Fontana 616,551 Ozburn-Hessey Logistics Inland Empire West Whse/Mfg Class A
1590 N Tamarind Ave, Rialto 543,400 XPO Logistics, Inc. Inland Empire East Whse/Mfg Class A
27573 River Bluff Ave, Redlands 542,977 Burlington Coat Factory Inland Empire East Whse/Mfg Class A
11250 Poplar Ave, Fontana 444,669 Go Plus, Inc. Inland Empire West Whse/Mfg Class A
13521 Santa Ana Ave, Fontana 423,460 DCG Fulfillment Inland Empire West Whse/Mfg Class B
2415 N Locust Ave, Rialto 401,914 The Hillman Group Inland Empire East Whse/Mfg Class A
2255 W San Bernardino Ave, Redlands -207,114 KPower Global Logistics Inland Empire East Whse/Mfg Class A
3392 Mike Daley Dr, San Bernardino -218,808 ES3 Inland Empire East Whse/Mfg Class A
13366 Philadelphia St, Fontana -266,950 Harman International Industries, Inc. Inland Empire West Whse/Mfg Class B
9050 Hermosa Ave, Rancho Cucamonga -468,682 Amaxi Foods Inland Empire West Whse/Mfg Class A
Top Transactions
Property Name Sale Price Sold (sf) Buyer Seller Submarket Specific Use
6227 Cajon Blvd, San Bernardino $68,537,370 806,322 Waterstone Northeast
TIAA CREF Inland Empire East Whse/Mfg Class A
12320 4th St, Rancho Cucamonga $24,400,000 283,792 Rexford Industrial Allen Commercial Realty Ltd
Inland Empire West Whse/Mfg Class B
1730 Eastridge Ave, Riverside $17,923,500 115,400 Calavo Growers Inc Campus Opco LLC and Fresh Foods LLC
Inland Empire East Whse/Mfg Class A
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New Construction
11,502,316
9,787,527
8,500,000
9,000,000
9,500,000
10,000,000
10,500,000
11,000,000
11,500,000
12,000,000
Inland Empire East Inland Empire West
Current Construction by Market
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Industrial Advisory Board Members
Inland Empire
CBRE Dave Consani
Jim Koenig
Colliers International Mark Zorn
Josh Hayes
Daum Commercial Rick John
Gus Andros
JLL Mike McCrary
Ruben Goodsell
Patrick Wood
Lee & Associates Michael Chavez
Majestic Realty Co Kyle Valley
NAI Capital Nick Chang
NGKF Mark Kegans
Ron Washle
Strata Realty Tim Hawke
Voit Walt Chenoweth
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This information has been obtained from sources believed reliable. While we do not doubt its accuracy, we
have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to
independently confirm its accuracy. For more information, please contact :
Matt Nelson Director of Analytics 714-509-1404 [email protected]
Monique Ebel Director of Research 714-538-8432 [email protected]
Sean Pullin Sales Executive 714-855-5801 [email protected]
Tim Hayes Executive Director - AIR 213-687-8777 [email protected]
Michael Foxworthy VP of National Accounts 805-807-6291 [email protected]
Brad Hauser VP of Analytics - Western Region 281-782-3944 [email protected]
Xceligent Inland Empire Team
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