The Inland Empire commercial real estate market entered the spring of 2026 with a complex but broadly encouraging story. Leasing volumes are rising sharply across key asset classes, a landmark retail transaction redefined the quarter’s investment headline, and the industrial market — the backbone of the entire region — is showing early and meaningful signs of stabilization after more than two years of correction.
This report covers industrial, retail, office, medical outpatient, and multifamily commercial performance across Riverside and San Bernardino Counties. Data is drawn from first-quarter 2026 research released by CBRE, Cushman and Wakefield, Kidder Mathews, and JLL throughout April 2026.
Industrial Sector: The Backbone in Transition
The Inland Empire industrial market remains the second-largest in the United States by rentable area, encompassing approximately seven hundred fifty-six point nine million square feet.
Vacancy across the market ranged between seven point seven percent and eight point five percent in the first quarter of 2026, depending on the research source and submarket measured.
The CBRE Inland Empire Core reading, covering both the Inland Empire East and West submarkets, settled at seven point eight percent vacancy — a seventy-basis-point increase quarter over quarter — driven primarily by large-format move-outs in the five hundred thousand square foot and above size category.
Cushman and Wakefield placed the overall vacancy figure slightly higher at eight point five percent, noting the rate was rising fifty basis points quarter over quarter and remained well above the ten-year average of four point zero percent.
Kidder Mathews reported direct vacancy at seven point seven percent for the first quarter of 2026, with availability at twelve point seven percent — an improvement compared to the fourth quarter of 2025.
Industrial Leasing: A Powerful Counterpoint
Despite the rising vacancy headlines, new leasing activity in the first quarter of 2026 was, by any measure, strong. CBRE reported thirteen point six million square feet of new deals signed — a forty point two percent increase from the nine point seven million square feet leased in the fourth quarter of 2025, and fifteen point three percent above the eleven point eight million square feet completed in the first quarter of 2025.
Net absorption turned positive at two point eight million square feet in the first quarter of 2026, up from two point two million square feet the prior quarter and well above the one point four million square feet recorded a year earlier.
That positive absorption trend, combined with the leasing surge, signals that demand is returning even as large tenants continue to consolidate space.
Asking lease rates in the Inland Empire Core averaged one dollar and nine cents per square foot per month on a triple net basis. Taking lease rates — the rates tenants are actually signing — rose four point nine percent quarter over quarter to one dollar and eight cents per square foot per month.
Kidder Mathews reported average asking rents declining to ninety-seven cents per square foot triple net, reflecting a six point seven percent year-over-year decrease as the market adjusts to elevated inventory levels.
The divergence between research firms reflects different submarket compositions, but the underlying message is consistent: tenants still hold negotiating leverage, and landlords are working harder to close deals.
Industrial Development: A Deliberate Slowdown
New construction starts returned to the Inland Empire after a complete pause in the fourth quarter of 2025. Eight hundred fifty-four thousand square feet of new development broke ground across the region in the first quarter of 2026.
However, completed construction totaled only one point six million square feet for the quarter — a thirty-two point two percent decline quarter over quarter and a forty-one point three percent decline year over year.
This pullback is a deliberate market correction. Since the first quarter of 2020, the Inland Empire has added one hundred thirty point three million square feet of new industrial construction — one of the fastest rates of expansion in the United States.
Developers are now pausing to let demand absorb the surplus. The contraction in the pipeline, as it continues to play out, is expected to gradually restore balance to vacancy rates by late 2026 or into 2027.
Retail Sector: A Quarter Defined by Victoria Gardens
The Inland Empire retail market had one of its most newsworthy quarters in years, driven largely by a single transformational transaction. Total retail investment sales surged to seven hundred thirty-six point nine million dollars in the first quarter of 2026, up sharply from five hundred twenty-five point six million dollars in the fourth quarter of 2025.
The centerpiece of that volume was the sale of Victoria Gardens — the iconic thirty-eight-property lifestyle mall in Rancho Cucamonga — which sold for five hundred thirty point nine million dollars to private investors.
That single transaction accounts for the vast majority of the quarter’s retail investment volume and stands as one of the largest commercial property sales in the Inland Empire’s history.
Retail Fundamentals: Tightening and Delivering
Beyond the headline transaction, the retail fundamentals across Riverside and San Bernardino Counties continued to firm. Availability edged down to six point nine percent in the first quarter of 2026 — a ten-basis-point decline from the prior quarter — as leasing momentum outpaced the addition of large-format space.
Net absorption rebounded sharply to four hundred eighteen thousand square feet of positive absorption, reversing the negative forty-six thousand square feet posted in the fourth quarter of 2025.
The recovery was driven by a shift toward larger lease transactions, with forty-four deals exceeding six thousand square feet completed during the quarter, compared to just twenty-five in the prior quarter.
Construction deliveries also nearly doubled, with one hundred eighty-five thousand square feet delivering in the first quarter of 2026, compared to ninety-three thousand square feet in the prior quarter.
Population growth across the Inland Empire continues to underpin demand for new retail development, even as the region navigates broader economic headwinds.
The overall average net asking rent held steady at one dollar and seventy-one cents per square foot per month on a triple net basis, with large-format vacancies limiting landlords’ ability to push rents higher.
Average retail sales pricing, however, surged to four hundred seventy-seven dollars per square foot — a remarkable thirty-seven point five percent annual increase, according to Kidder Mathews, reflecting strong investor conviction in well-located retail assets.
Office Sector: Resilient Despite Headwinds
The Inland Empire office market softened in the first quarter of 2026, with net absorption falling to negative ninety-nine thousand six hundred square feet — a reversal of one hundred fifteen thousand square feet compared to the fourth quarter of 2025.
Vacancy increased modestly to six point one percent, up forty basis points quarter over quarter, as larger tenants continued to right-size their space footprints.
Despite those headwinds, the Inland Empire remains the only major regional metro in Southern California with a single-digit office vacancy rate — a distinction that continues to attract tenants priced out of Los Angeles and Orange Counties.
Asking rents proved resilient, increasing three cents quarter over quarter to two dollars and twenty-three cents per square foot on a full-service gross basis, supported by the addition of large Class A availabilities carrying above-average pricing.
Office rent in the Inland Empire is approximately fifty percent less expensive than in Los Angeles County and twenty-eight percent less expensive than in Orange County — an enduring competitive advantage for the region.
Medical Outpatient: Steady Demand in Healthcare Corridors
The Inland Empire medical outpatient building market posted a modest vacancy increase of ten basis points in the first quarter of 2026, rising to five point three percent from five point two percent in the fourth quarter of 2025.
Leasing volume improved, rising nearly ten percent during the quarter, driven in part by a five thousand square foot lease in the City of Riverside.
Healthcare employment across the region experienced a quarterly decline of approximately five hundred jobs, though annual healthcare employment growth remains healthy at nine percent year over year.
The prior-quarter medical office sale of two buildings in Riverside County — totaling eighty-five thousand two hundred four square feet and sold for a combined fifty-three million dollars — illustrated ongoing institutional appetite for healthcare real estate in the region.
Those properties, located in Jurupa Valley and Corona, were both fully leased and arranged by Cushman and Wakefield, reflecting strong demand for income-producing medical assets near established healthcare networks.
Multifamily Sector: Volume Dips but Pricing Holds
Multifamily investment sales in the Inland Empire totaled one hundred eight point seven million dollars in the first quarter of 2026, down from one hundred twenty-seven point two million dollars in the fourth quarter of 2025.
Despite lower transaction volume, pricing per unit actually increased to two hundred sixty-two thousand dollars, supported by the institutional acquisition of The Hawthorne — a newly built one hundred seventy-eight unit apartment community in Riverside.
Occupancy declined for the third consecutive quarter, closing at ninety-five point four percent in the first quarter of 2026, down ten basis points from the prior quarter.
Coastal migration into the Inland Empire continues to support multifamily demand fundamentals, with families and remote workers seeking more affordable housing than coastal Los Angeles or Orange County markets can offer.
Notable Transactions and Deals of Note
Beyond the Victoria Gardens sale, several other transactions defined the first quarter and April 2026 activity period across the Inland Empire.
Hanley Investment Group Real Estate Advisors arranged the sale of two new-construction, single-tenant Quick Quack Car Wash properties in San Bernardino County, closing in early April 2026.
Hanley also closed sales of two new Starbucks properties in Pomona and San Bernardino, totaling eight point one four million dollars — a sign that fast-casual and service retail continues to trade actively.
An SRS Real Estate Partners Capital Markets team completed a six point one five million dollar ground lease sale of a five-thousand-square-foot Chick-fil-A property in the Inland Empire, reflecting continued demand for single-tenant net-lease investment product.
Cushman and Wakefield is now marketing a fourteen-hundred-acre residential development site centrally located within the Inland Empire — one of the largest development land offerings to hit the Southern California market in recent years.
Riverside County also conducted a tax-defaulted property auction on Bid4Assets from April twenty-third through April twenty-eighth, 2026, offering nine hundred forty-six parcels including multiple commercial properties.
Flex and Small-Bay Industrial: The Market’s Hidden Leader
One of the clearest emerging trends across the Inland Empire in April 2026 is the sustained and disproportionate demand for smaller, functional flex spaces.
Colliers Inland Empire Industrial Research data shows that small-bay and mid-size flex spaces lease faster than large-format properties, particularly in infill and logistics-adjacent submarkets.
Leasing velocity remains strongest in properties under twenty thousand square feet, particularly those offering clear height, loading access, and proximity to population centers.
Cushman and Wakefield market beat reports confirm that industrial vacancy remains comparatively tight in key Inland Empire submarkets for this size category, supporting stable lease rates even as larger big-box spaces sit vacant longer.
This divergence between large-format and small-bay performance is critical intelligence for owners and investors repositioning assets in the current market.
Competitive Advantage: Why the Inland Empire Continues to Draw Capital
The Inland Empire’s pricing advantage over coastal markets remains a structural, enduring feature of its commercial real estate story. Industrial rent in the Riverside and San Bernardino area is nineteen percent less expensive than Los Angeles County and thirty-one percent less expensive than Orange County.
Retail rent is forty-two percent less expensive than Los Angeles County and thirty-one percent less expensive than Orange County.
Office rent, as noted above, runs fifty percent below Los Angeles County comparable properties.
Combined with the region’s strategic location at the intersection of Interstate 10, Interstate 15, and Interstate 210 near the Ontario International Airport, the Inland Empire remains one of the most logistically superior commercial real estate markets in the western United States.
What the Data Suggests
The first-quarter 2026 data presents a market at a genuine inflection point. Industrial vacancy is elevated but leasing momentum is accelerating, new supply is contracting, and absorption is trending positive.
Retail is tightening. The Victoria Gardens sale alone sent a powerful signal: institutional and private capital still has conviction in lifestyle retail at scale in the Inland Empire.
Office remains the most nuanced sector. Vacancy is rising modestly and absorption dipped negative, but the Inland Empire’s single-digit vacancy rate is unique among Southern California metros and attracts tenants on price alone.
Medical outpatient and small-bay industrial are the quiet overperformers. Both sectors post tight vacancy, improving leasing volume, and strong investor interest, even in a broader market that is still recalibrating.
The data collectively suggests that the Inland Empire has moved through the peak of its correction cycle and is now in an early stabilization phase. That is where patient, well-positioned capital gets rewarded.
Closing Remarks
The Inland Empire is not a market in retreat — it is a market in recalibration. The fundamentals of population growth, port proximity, logistics demand, and relative affordability remain intact and compelling.
Savvy executives, owners, and contractors who understand the submarket nuances — particularly the divide between large-format vacancy and tight small-bay demand — will find opportunities in this environment that others may overlook.
The question for executives and investors today is not whether the Inland Empire matters. The question is whether your positioning is right for where this market is going — not just where it has been.
References
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CBRE, “Inland Empire Industrial Figures Q1 2026,” April 10, 2026: https://www.cbre.com/insights/figures/inland-empire-industrial-figures-q1-2026
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CBRE, “Inland Empire Retail Figures Q1 2026,” April 28, 2026: https://www.cbre.com/insights/figures/inland-empire-retail-figures-q1-2026
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CBRE, “Inland Empire Office Figures Q1 2026,” April 8, 2026: https://www.cbre.com/insights/figures/inland-empire-office-figures-q1-2026
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CBRE, “Inland Empire Medical Outpatient Figures Q1 2026,” April 29, 2026: https://www.cbre.com/insights/figures/inland-empire-medical-outpatient-figures-q1-2026
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CBRE, “Inland Empire Multifamily Figures Q1 2026,” April 27, 2026: https://www.cbre.com/insights/figures/inland-empire-multifamily-figures-q1-2026
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Cushman and Wakefield, “Inland Empire Industrial MarketBeat Q1 2026,” April 15, 2026: https://www.cushmanwakefield.com/en/united-states/insights/us-marketbeats/inland-empire-marketbeats
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Kidder Mathews, “Inland Empire Industrial Market Report Q1 2026”: https://kidder.com/market-reports/inland-empire-industrial-market-report/
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Kidder Mathews, “Inland Empire Retail Market Report Q1 2026”: https://kidder.com/market-reports/inland-empire-retail-market-report/
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Connect Commercial Real Estate, “Inland Empire Stories,” May 2026: https://www.connectcre.com/story-market/inland-empire/
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Los Angeles Times Business-to-Business, “53 Million Dollar Riverside Medical Office Sale,” February 2026: https://www.latimes.com/b2b/commercial-real-estate/story/2026-02-24/53m-riverside-medical-office-sale
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San Bernardino County Economic Development Agency, “Commercial Real Estate Market Indicators”: https://indicators.sbcounty.gov/economy/commercial-real-estate-market/
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J.C. Casillas, LinkedIn, “Inland Empire Industrial Market Off to a Strong Start in 2026,” March 2026: https://www.linkedin.com/pulse/inland-empire-industrial-market-off-strong-start-2026-j-c-casillas-zncmc
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Voit Real Estate Services, “Promising Signs Emerging in SoCal Industrial Market,” January 2026: https://voitco.com/sandiego/promising-signs-emerging-in-socal-industrial-market/
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Inland Empire Business Journal, Commercial Real Estate Transactions: https://iebizjournal.com/category/commercial-real-estate/