INDUSTRIAL MARKET REPORT
Inland Empire
1st Quarter 2016
Produced in partnership with
2016 Q1 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
Table of Contents/
Methodology of Tracked Set
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 and Methodology/Map
2-3
Market Overview
4-5
Statistics by Market
6
Vacancy Rates & Asking Rates
7-8
Leasing & Absorption
9-10
New Construction
11
Industrial Advisory Board Members
12
Xceligent Team
13
The Inland Empire tracked set consists of an inventory of buildings considered to be competitive by
the brokerage community. All buildings within the competitive tracked set have been reviewed and
verified by members of the Advisory Boards for the market area.
Tracked
Inventory
(Industrial)
The total square feet of all single and multi-tenant buildings greater than 10,000 sf, including
owner occupied facilities. Flex/R&D buildings with an office build out greater than 30% and a
parking ratio greater than 3:1,000 are excluded.
Available SF
All of the available leasable space within a building, whether it is occupied or vacant, for
direct lease or sublease space. Space can be available but not vacant, for example, if the
landlord, or his agent, is marketing space that will be coming available at a future date
because a tenant is planning to move.
Vacant SF
The total of the direct vacant square footage in a building that is being marketed.
Net
Absorption
The net change in occupied square feet from quarter to quarter, expressed in square feet.
Note
This report reflects Direct Vacancy and Absorption, Sublease space is excluded.
2016 Q1 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
2
Industrial Market Map
2016 Q1 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
3
Inland Empire Industrial Overview
Overview

After a record year in 2015, the Inland Empire kicked off 2016 right where it left off posting a solid 1.8 million square
feet of positive net absorption.

6.95 million square feet of new product was delivered in the first quarter, 2.7 million square feet of the new
construction remains vacant.

Despite having 5+ consecutive quarters with positive net absorption, the vacancy rate remains at 3.4%, right where
it was 1 year ago.

Amazon continues to expand its Inland Empire presence by signing a new 1.1 million square foot lease at the newly
constructed Alliance California Gateway South development in San Bernardino.
# of Bldgs
Inventory (SF)
Total Available (SF)
Total Vacant (SF)
Total Vacancy
Rate (%)
Total Quarterly Net
Absorption (SF)
YTD Total Net
Absorption (SF)
Whse/Mfg Class A
1,062
218,132,051
18,308,112
12,166,705
5.6%
2,022,924
2,022,924
Whse/Mfg Class B
3,336
222,676,170
8,876,255
3,334,000
1.5%
61,751
61,751
Whse/Mfg Class C
1,950
58,220,410
2,587,446
1,371,939
2.4%
(281,335)
(281,335)
Grand Total
6,348
499,028,631
29,771,813
16,872,644
3.4%
1,803,340
1,803,340
# of Bldgs
Sum of Direct
Available SF
Inventory (SF)
Direct Vacant (SF)
Direct Vacancy Direct Quarterly Net
Rate (%)
Absorption (SF)
YTD Direct Net
Absorption (SF)
Whse/Mfg Class A
1,062
218,132,051
16,062,258
12,015,221
5.5%
2,013,613
2,013,613
Whse/Mfg Class B
3,336
222,676,170
8,428,694
3,315,800
1.5%
(199,677)
(199,677)
Whse/Mfg Class C
1,950
58,220,410
2,560,872
1,361,585
2.3%
(285,179)
(285,179)
Grand Total
6,348
499,028,631
27,051,824
16,692,606
3.3%
1,528,757
1,528,757
# of Bldgs
Inventory (SF)
Available Sublease
(SF)
Sublease Vacant Sublease Vacancy Sublease Quarterly
(SF)
Rate (%)
Absorption (SF)
YTD Sublease Net
Absorption (SF)
Whse/Mfg Class A
1,062
218,132,051
2,245,854
151,484
0.1%
9,311
9,311
Whse/Mfg Class B
3,336
222,676,170
447,561
18,200
0.0%
261,428
261,428
Whse/Mfg Class C
1,950
58,220,410
26,574
10,354
0.0%
3,844
3,844
Grand Total
6,348
499,028,631
2,719,989
180,038
0.0%
274,583
274,583
Historical Vacancy Rate & Net Absorption
8,000,000
3.8%
6,000,000
3.6%
3.4%
4,000,000
3.2%
2,000,000
3.0%
-
2.8%
2015 Q1
2015 Q2
2016 Q1 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
2015 Q3
2015 Q4
2016 Q1
4
Inland Empire Industrial Overview
Historical Vacancy Rates by Use
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
2016 Q1
2015 Q4
2015 Q3
Whse/Mfg Class A
2015 Q2
Whse/Mfg Class B
2015 Q1
Whse/Mfg Class C
Historical Net Absorption by Use
5,552,098
5,500,000
4,500,000
3,613,013
3,500,000
2,832,266
2,365,234
2,500,000
2,022,924
1,500,000
1,375,878
693,552
265,155
500,000
389,570
219,081
61,751
(281,335)
204,405
50,210
344,984
(500,000)
2015 Q1
2015 Q2
Whse/Mfg Class A
2015 Q3
Whse/Mfg Class B
2016 Q1 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
2015 Q4
2016 Q1
Whse/Mfg Class C
5
Statistics by Market
# of Bldgs
Inland Empire East
Inventory (SF)
Total Vacant (SF)
Sublease
Vacant (SF)
Vacancy
Rate (%)
Total Quarterly
Absorption
YTD Total Net
Absorption (SF)
2,827
214,708,125
11,400,972
161,838
5.3%
2,611,297
2,611,297
10,000 - 24,999 SF
1,480
23,291,454
481,275
10,354
2.1%
138,062
138,062
25,000 - 49,999 SF
609
21,175,481
529,485
-
2.5%
(11,452)
(11,452)
50,000 - 99,999 SF
336
22,996,043
428,835
-
1.9%
(11,357)
(11,357)
100,000 - 249,999 SF
222
33,201,471
1,013,371
151,484
3.1%
323,022
323,022
250,000 - 499,999 SF
82
30,240,947
1,838,506
-
6.1%
753,590
753,590
Greater than 500,000 SF
98
83,802,729
7,109,500
-
8.5%
1,419,432
1,419,432
Inland Empire West
3,521
284,320,506
5,471,672
18,200
1.9%
(807,957)
(807,957)
10,000 - 24,999 SF
1,667
25,916,749
249,271
1,400
1.0%
68,663
68,663
25,000 - 49,999 SF
712
24,636,063
219,119
-
0.9%
61,553
61,553
50,000 - 99,999 SF
432
30,120,854
441,735
16,800
1.5%
(36,851)
(36,851)
100,000 - 249,999 SF
410
62,261,859
802,632
-
1.3%
(33,934)
(33,934)
250,000 - 499,999 SF
208
74,104,662
1,561,328
-
2.1%
56,838
56,838
92
67,280,319
2,197,587
-
3.3%
(924,226)
(924,226)
6,348
499,028,631
16,872,644
180,038
3.4%
1,803,340
1,803,340
Greater than 500,000 SF
Grand Total
2016 Q1 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
6
Vacancy Rates & Asking Rates
Vacancy Rate %
Average Weighted Direct Asking Rate
2015 Q1
2015 Q2
2015 Q3
2015 Q4
2016 Q1
2015 Q1
2015 Q2
2015 Q3
2015 Q4
2016 Q1
5.2%
4.8%
5.8%
5.3%
5.3%
$0.37
$0.41
$0.42
$0.44
$0.40
Whse/Mfg Class A
7.9%
7.6%
9.6%
8.8%
8.5%
$0.34
$0.37
$0.40
$0.40
$0.39
Whse/Mfg Class B
2.7%
2.2%
2.0%
2.0%
2.1%
$0.54
$0.55
$0.55
$0.45
$0.44
Whse/Mfg Class C
3.1%
3.0%
2.6%
1.6%
2.1%
$0.36
$0.37
$0.36
$0.36
$0.37
2.1%
2.0%
2.0%
1.5%
1.9%
$0.44
$0.43
$0.41
$0.51
$0.53
Whse/Mfg Class A
2.8%
2.7%
2.9%
1.9%
2.7%
$0.42
$0.41
$0.37
$0.49
$0.53
Whse/Mfg Class B
1.6%
1.4%
1.4%
1.1%
1.2%
$0.49
$0.44
$0.42
$0.55
$0.54
Whse/Mfg Class C
2.6%
2.6%
2.2%
2.2%
2.8%
$0.59
$0.61
$0.60
$0.50
$0.51
3.4%
3.2%
3.6%
3.1%
3.4%
$0.39
$0.42
$0.42
$0.46
$0.44
Inland Empire East
Inland Empire West
Grand Total
2016 Q1 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
7
Vacancy Rates & Asking Rates
Vacancy Rate by Submarket
5.3%
1.9%
Inland Empire East
Inland Empire West
Average Weighted Asking Rates by Submarket
$0.53
$0.40
Inland Empire East
$1.20
$1.00
Inland Empire West
Asking Lease Rate Range by Type (NNN)
$1.01
$0.95
$0.80
$0.70
$0.60
$0.40
$0.20
$0.47
$0.37
$0.42
$0.31
$0.43
$0.29
$-
Whse/Mfg Class A
Whse/Mfg Class B
2016 Q1 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
Whse/Mfg Class C
8
Leasing & Absorption
Largest Absorption Changes
Property Name
SF Occupied or Vacated
555 E Orange Show Rd
1,102,639
7295 San Gorgonio Dr
Tenant Name
Submarket
Specific Use
Amazon
Inland Empire East
Whse/Mfg Class A
582,772
Ascena Retail Group
Inalnd Empire East
Whse/Mfg Class A
19520 W Baseline Rd
373,771
Under Armour
Inalnd Empire East
Whse/Mfg Class A
27334 San Bernardino Ave
341,280
Munchkin, Inc.
Inland Empire East
Whse/Mfg Class A
1508 W Casmalia St
219,024
Guitar Center
Inland Empire East
Whse/Mfg Class A
2553 Sampson Ave
193,268
Nielsen Bainbridge Group Inland Empire East
Whse/Mfg Class A
17825 Indian St
160,795
Fisker Automotive
Inland Empire East
Whse/Mfg Class A
3655 E Philadelphia St
(333,206)
SYNNEX Corporation
Inland Empire West Whse/Mfg Class A
1990 S Cucamonga Ave
(416,713)
Home Depot
Inland Empire West Whse/Mfg Class A
9774 Calabash Ave
(591,020)
Distribution Alternatives
Inland Empire West Whse/Mfg Class A
14800-14900 Meridian Pkwy
(607,259)
Fresh & Easy
Inland Empire East
Whse/Mfg Class B
Submarket
Specific Use
Top Transactions
Property Name
2250 W Lugonia Ave
1464 W Merrill Ave
10395 Nobel Ct
Sale Price
SF Sold
Buyer
Ashley Furniture
$79,040,000 1,013,331
Industries Inc
Exeter 1464
$34,000,000
436,650
West Merrill LLC
Mintra
$16,905,000
154,380
Investments LLC
2016 Q1 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
Seller
Redlands Business
Center LLC
Inland Empire East
Whse/Mfg Class A
Prologis LP
Inland Empire East
Whse/Mfg Class A
PSIP WR Mira Loma
Inland Empire West
Commerce Center II
Whse/Mfg Class A
9
New Construction
Current New Construction by Submarket
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
-
Inland Empire East
2016 Q1 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
Inland Empire West
10
Industrial Advisory Board Members
Inland Empire
Dave Consani
CBRE
Jim Koenig
Mark Zorn
Colliers International
Josh Hayes
Rick John
Daum Commercial
Gus Andros
JLL
Lee & Associates
Mike McCrary
Michael Chavez
Majestic Realty Co.
Kyle Valley
NAI Capital
Nick Chang
Mark Kegans
Newmark Grubb Knight Frank
Ron Washle
Strata Realty
Voit Real Estate Services
2016 Q1 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
Tim Hawke
Walt Chenoweth
11
Xceligent Inland Empire Team
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
mnelson@xceligent.com
Monique Ebel
Director of Research
714-538-8432
mebel@xceligent.com
Sean Pullin
Director of Client Services
714-855-5801
spullin@xceligent.com
Tim Hayes
Executive Director - AIR
213-687-8777
thayes@airea.com
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2016 Q1 Market Trends © 2016 by Xceligent, Inc. All Rights Reserved
12