Inland Empire Retail Rents Up 13%

The Inland Empire has the fastest growing retail rents in Southern California. According to a new report from NAI Capital, retail rents were up 13% in the Inland Empire for 2018, compare to 2017. Los Angeles retail rents also grew year-over-year, but only by 1.7%, while Ventura County and Orange County remained relatively flat, according to the report. Thanks in large part to the industrial sector, the Inland Empire market has benefitted from job and population growth in recent years, helping to drive real estate investment in multifamily and retail assets.

“The region is seeing a migration from West to East seeking relief from the high price of housing in Los Angeles and Orange Counties,” Lidia Talavera, EVP at NAI Capital Ontario, tells GlobeSt.com. The Inland Empire also ranked number seven among the top 10 highest-gaining metro areas. Average household incomes in the region are rising and are expected to increase, creating consumer demand for high-end retail. The yearend unemployment rate in the Inland Empire at 4% is the lowest in a decade. The demand for housing is also driving the demand retail in the Inland Empire.”

New retail construction activity is also up. Nearly 1.4 million square feet of new construction delivered in the market last year, including the 430,000-square-foot Renaissance Marketplace in Rialto, the 360,000-square-foot Page Plaza in Hemet and the 49,660-square-foot Gateway in Temecula. All of these properties are commanding higher rents. “These lifestyle-oriented destinations command top of the market rents, which contributed to the rise in average asking rent,” says Talavera. “Driving the demand for new construction in the Inland Empire’s retail market—and retail in general—is population and employment growth.”