Report: Warm-up Coming to Inland Empire

CORONA, CA—The Corona industrial market, considered a barometer for Riverside County, due to its proximity to neighboring Orange County, is exhibiting improving rates and significant increases in sales prices, a trend which will only continue throughout the remainder of 2014, and well into 2015.

This according to the Riverside office of Lee & Associates.

The broker-owned commercial real estate firm, has released its third quarter 2014 industrial market summary for manufacturing/distribution buildings for the Corona market in Southern California's Inland Empire.

Corona tends to respond to changes in the market ahead of the surrounding markets in the Inland Empire, the firm says. This provides an early indicator to coming trends and allows some foresight into what may lie ahead for the Inland Empire market as a whole.

The summary reports that with the lack of available product, limited new construction, and vacancy rates now below the 2% mark, the Corona market is exhibiting improving rates and significant increases in sales prices, a trend which will only continue throughout the remainder of 2014, and well into 2015.

The report also illustrates that there is just over 1.0 million square feet under construction in twelve buildings, a relatively small amount for a market with historically low vacancy levels. Furthermore, there is only one additional planned building for this market. Despite this rather low production pipeline, new development will likely remain limited due to the shortage of land available for new industrial development.

Among the projects currently under construction in the Corona market is the four building Magnolia Point project, currently marketed by Jeff Ruscigno, SIOR with the Riverside office of Lee & Associates, which is expected to be completed in early November 2014. The project is located at the intersection of East 6th Street and Magnolia Avenue and totals 525,860 square feet. This project has garnered significant attention from local users, with one of the buildings currently in escrow to a user and several interested prospects for the remaining buildings.

Another indicator of the growing strength of the market is the repeated trend of lowering vacancy rates. Vacancy rates decreased in the third quarter to 1.96% representing the 13th consecutive quarter that the rate has been below the 5% level, this trend has not been seen since 2008. Indicative of this are several recent transactions all of which have a common theme of buildings leasing prior to ever becoming vacant. The team of Larry Null, SIOR, Matt Rossman and Justin Null of the Riverside office of Lee & Associates has completed transactions at 555 Promenade Avenue, 283 Winfield Circle, 2891 Sampson Avenue and 238 Glider Circle, all leasing prior to becoming vacant and all occurring within a two week time period. These transactions resulted in 97,000 square feet of activity and a total consideration of $3.2 million. At this pace, vacancy rates are expected to remain at record low levels throughout the remainder of 2014.

Celebrating more than 35 years of leadership excellence in commercial real estate, Lee & Associates is the largest broker-owned firm in the country with 50 locations across the nation including California, Arizona, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Maryland, Michigan, Missouri, Nevada, New Jersey, New York, Ohio, South Carolina, Texas, and Wisconsin.