The Inland Empire ranked third in the nation last year for warehouse leases of more than 1 million square feet, according to a CBRE survey.
The real estate brokerage attributed the surge to a boost in e-commerce sales, a rebounding economy and new supply chain strategies calling for more warehouse and distribution space, the Inland Valley Daily Bulletin reported.
The 10 biggest warehouse leases in Riverside and San Bernardino counties totaled 10.2 million square feet.
Economist John Husing compared ravenous growth in warehouse construction to the appetite of Pac-Man, the video game chomper of yore. “It looks like the Inland Empire is about to eat up the rest of Southern California,” he said.
The IE warehouse growth is attributed to a surge in e-commerce as more consumers buy online during the pandemic, he said. Prices of industrial leases have gone up as well, from 57 cents a square foot in 2018 to $1.07 a square foot in 2021.
Last year, 22.8 million square feet of warehouse space was absorbed in the Inland Empire, Husing said. Another 22.5 million square feet of warehouse space was under construction in December 2021.
In December, third-party logistics company Lecangs leased a 1.2 million-square-foot distribution warehouse in Perris. The company is a division of The company is a division of Loctek Ergonomic Technology Corp., which makes ergonomic products that include desks, computer monitor mounts and mobile carts.
“Industrial demand has been growing rapidly in the last year and the market has been extremely competitive,” said Chuck Belden, a vice chairman with Cushman & Wakefield’s Inland Empire office. “Buildings do not remain available on the market for very long, with some being pre-leased even prior to construction, as well as being leased at high rental rates.”
Only 18 of the top 100 U.S. transactions in 2021 were renewals, CBRE said, signaling that demand is coming from businesses with a growing appetite for big spaces.
Chicago topped CBRE’s list, followed by the I-78/81 freeway corridor in Pennsylvania, the Inland Empire, Dallas/Fort Worth, Atlanta, Indianapolis, Phoenix, Columbus, Ohio, central New Jersey, and Greenville/Spartanburg, S.C.
The demand is expected to continue in 2022, despite a dwindling supply of large facilities in core markets and a tight supply of available land for development.
Nonetheless, the Inland Empire has room for warehouse growth, which is pushing its way out into exurbs such as Moreno Valley, Beaumont, Banning, Apple Valley and Victorville, Husing said.
In yet another sign of continued heat, Newport Beach-based Alere Property Group this week paid $200 million for a 709,081-square-foot business center near March Air Force Base in Riverside, the Daily Bulletin reported.
The warehouse at 2677 E. Alessandro Blvd. sits on 39 acres and is fully leased to UNIS, a national third-party logistics provider. Its neighbors include tenants Amazon, UPS, Home Depot, Procter & Gamble, Ross Stores and Lowe’s.
This month, Newport Beach-based KB Investment Development also got the go-ahead to build two online distribution warehouses spanning 600,000 square feet in Riverside. In December, a joint venture was set to develop nearly 200 acres of land at empty fields next to Ontario International Airport.