WEST RIVERSIDE COUNTY Industrial
• Receding from a record-shattering $ 10 billion in 2022 , transaction volume dropped to $ 4.9B in 2023 and is on pace for a slightly lower total in 2024 through mid-year . Transaction volume in Southwest Riverside submarket over the past 12 months is almost comparable to that of the much larger Airport Area , San Bernardino , and Moreno Valley / Perris , where volumes have dropped significantly .
• With lending constraints , more deals have been driven by cash buyers and 1031 exchange requirements . Private buyers have accounted for a majority of recent sales volume with institutional and REIT / public buyers following closely behind . While rents are ticking lower midway through 2024 , cap rates are forecasted to rise modestly through late 2024 .
$ 1.2B 12 Month Sales Volume
$ 69.8B
Asset Value
4.75 % Market Cap Rate
• Businesses are padding inventories again this year , and imports to the nearby port of Long Beach and Los Angeles are rebounding with a new labor agreement in place through mid-2028 . Droughtdriven bottlenecks at the Panama Canal and Gulf ports following labor contract expirations this September have already led some logistics managers to diver freight to Southern California which accounts for roughly a third of all U . S . imports .
• Due to pressure from downsizing tenants and speculative development , properties in the 100- 500K SF range currently have the market ’ s highest availability rates , while buildings smaller than 50K SF and over 1M SF remain in strong demand .
• Relocations into the new wave of industrial inventory has resulted in older , less functional buildings losing occupancy and therefore creating an upward pressure on market vacancies . Region-wide vacancy has risen for eight consecutive quarters from an all-time low of 1.3 % in mid-2022 to 7.8 % as of mid-2024 .
• Temporary moratoriums on industrial development were passed in a handful of Inland Empire cities in 2021-2022 , showing a growing resistance from residents that could constrain future construction . Even so , the pipeline of 45 million SF of space that initiated construction in 2022-2023 is slowly emptying and the minimal amount of development on track to deliver a year from now coupled with the recent improvement in leasing signals the potential for the return to significant rent growth in 2025 .
10 | Coldwell Banker Commercial Land Team 2024 Riverside County Market Report
7.80 % Market Vacancy Rate
6.18M SF Under Construction
269M SF
Inventory
$ 268 Market Sale Price / SF
$ 13.79 Market Rental Rate / SF Source : CoStar