Industrial Developers Head to Inland Empire East

Industrial developers are turning to the Inland Empire for relief from the now land-constrained Inland Empire West market. After several years of an industrial development boom in the western portion of the market, developers are now finding limited opportunities for new construction particularly of big box warehouse space that is high demand in the market. According to a new report from JLL, vacant industrial land is approaching 2% while the Inland Empire East has 14 million square feet under construction.

“It’s really the availability of land, and even more specifically, larger tracks of land that’s driving development demand in the Inland Empire East,” Patrick Wood, managing director at JLL, tells GlobeSt.com. “The Inland Empire West, which is now widely considered an in-fill market, has a very limited large developable sites left so in order to keep up with the demand of occupiers,  developers must continue pushing east.  But once you get into the smaller size segment, call it sub 10-acres, demand in the East is much softer as developers are much more specific about land they’re willing to acquire for development. That same sub-10-acre market in the IE West is absolutely on fire.”

Most of the development in the Inland Empire East market is in the big box size range, 300,000 square feet or bigger. “That doesn’t mean smaller projects are not also being developed,” adds Wood. “For instance, we are marketing for Operon Group a new development called the 210 Business Park in Rialto, which consists of three buildings ranging in size from 30,564 square feet to 69,068 square feet. The buildings won’t be completed until the end of 2019; nevertheless, activity has been very robust and I don’t expect any of the buildings will be available by the time construction is completed.  The larger, big and mega-box developments are still targeting distribution and fulfillment related users, obviously a lot of that demand driven by the growth of ecommerce.”