ONTARIO, CA—The vacancy rate for industrialbuildings under 100,000 square feet remains tight at 2.8% in theEast Inland Empire and 2.2% in the West Inland Empire, reportsColliers International. As GlobeSt.com reported exclusively last week, vacancies aredropping and new construction soaring aslogistics companies grow and e-retailers increasetheir appetites for large distribution andwarehousing centers in the Inland Empire, according to the firm.

But there is still some availability for smaller space in thismarket. “These smaller buildings are the ones that tend to getoverlooked when tenants and developers are discussing the InlandEmpire market,” says Richard Schwartz, SVP forColliers, who specializes in these submarkets. “There are a numberof opportunities that tenants in this size range may be missing ifthey do not look here.”

Colliers is anticipating that 3.1 million square feet of newconstruction completions will take place during the fourth quarter,with 60% of it pre-leased. Average asking rental rates in theInland Empire have remained flat year-over-year at 42 cents persquare foot on a triple-net basis, according to the firm, butasking rental rates can be an inaccurate indicator of a market'sactual rental-rate capacity. “That's why a significant portion ofthe larger projects that are being brought to market haveundisclosed asking lease rates, making it more difficult for us todetermine accurate asking rental-rate information,” says Schwartz.“With 11 projects over 500,000 square feet currently on the marketand another building of that size scheduled to come on in themarket in the fourth quarter, none of which have listed askingprices, it is often very difficult to determine with any accuracyan average asking rental rate for the smaller buildings in otherparts of the Inland Empire. However, that really doesn't matterwhen you factor in these large buildings since they can skew thenumbers greatly.”