Scope: Market (Inland Empire) · Property type: industrial, office, retail · Confidence: Medium
What Happened
Brokerage reports from the past three months give the Inland Empire three different stories. Industrial figures are from Q2 2026 and retail from Q3. Office and industrial Q3 reports have not been published yet.
Industrial, the big one, looks like it is stabilizing. CBRE has IE Core vacancy at 7.4% in Q2, down 40 basis points, with new leasing of 15.5 million square feet, up 41.7% from a year earlier. Rents have not followed. CBRE shows core asking rents at $1.08 per square foot per month and taking rents at $1.05, down $0.03 in the quarter. Kidder Mathews has asking rents at $0.98 NNN, down 4.85% from a year ago.
Office is the tight one. Kidder Mathews puts Q2 vacancy at 5.0%, with asking rents of $2.12 per square foot per month, up 4.95% year over year. Nothing has been delivered in 2026 so far, and only about 198,000 square feet is under construction.
Retail improved in Q3. Kidder Mathews has vacancy at 6.0% against 6.4% a year earlier, asking rents of $1.77 (up 4.16%), and net absorption of about 402,000 square feet in the quarter.
The Bigger Picture
The headline numbers disagree, and the disagreement is worth knowing before you quote them.
On industrial vacancy, CBRE says 7.4% for the core, Kidder says 7.6% direct, and Cushman & Wakefield says 8.8%. These count different geographies and inventory. Absorption splits too. Kidder shows Q2 net absorption of negative 186,642 square feet, while Cushman & Wakefield reports occupancy losses of 3.8 million square feet through mid-year. Meanwhile CBRE reports leasing at a high. Those are not contradictions so much as different questions: how much space got leased, and how much more space got occupied.
Kidder adds the number that matters most for owners: total availability of 12.9% once sublease space is counted, against 7.6% direct vacancy. A tenant looking at that market sees much more space than the vacancy rate suggests.
Supply is the clear tailwind. CBRE has 6.2 million square feet under construction, 41.3% below a year ago, with only 1.2 million square feet delivered in the quarter. Kidder expects that slowdown, with rising absorption, to shift negotiating leverage gradually back to landlords. That is an expectation, not a fact yet.
Port traffic supports demand. Lee & Associates reports the Ports of Los Angeles and Long Beach handled about 5.17 million TEUs in Q2, up 10.9% from a year earlier. Commercial Observer reports volume up 1.8% for the year through August, and quotes Port of Los Angeles Executive Director Gene Seroka: "Businesses continue to move cargo when they see windows of opportunity." Volume is up, but it is lumpy.
Office is a story of scarcity, not strength. Kidder shows net absorption of negative 15,549 square feet year to date, a sharp reversal from positive 607,463 square feet in 2025. Cushman & Wakefield, using a different basis, puts vacancy at 9.1%. A market can be tight and still not growing.
Retail is the most nuanced. Vacancy is falling and rents are rising, and Kidder also reports cap rates widening to 7.0% from 5.9%, so investors are pricing in more risk than tenants are showing. The largest new project, The Ranch at Model Colony (206,043 square feet), delivers in Q4.
What It Means for Tenants
Industrial tenants still have the room. Taking rents sit below asking, concessions are available, and sublease space adds supply. The advantage is time-limited if Kidder's outlook plays out, so a tenant with a 2027 expiration should start the conversation early rather than late. West is tighter than East (5.9% against 9.0% vacancy per CBRE), so location flexibility is worth real money.
Office tenants have little to bargain with. With 5.0% vacancy and no new supply, the option is the building you are already in. Renewals matter more than relocations.
Retail tenants are in a firming market. Rents are up, vacancy is down, and new supply is shrinking. Quality locations will not stay available long.
The Broker Angle
The three markets create three different jobs.
For industrial landlord reps, the problem is not whether the market is coming back. It is which building fills. With about 7.6% direct vacancy and 12.9% total availability, an owner with an empty box and a loan coming due needs a lease-up plan that names specific companies by size, location and use. That is the sourcing work TenantScout exists to speed up.
For tenant reps, the gap between asking and taking rents in industrial is a negotiation, and the data to anchor it exists. Bring both numbers.
For office and retail reps, the opportunity is in the tail. Kidder's retail numbers show where activity is landing (a 103,525-square-foot lease at Rancho Del Chino is an example), and the office market's lack of new supply means every vacancy that opens is worth chasing early.
What We're Watching
- Q3 industrial and office prints from CBRE, Kidder Mathews and Cushman & Wakefield, expected in the next few weeks. The question is whether taking rents stop falling.
- Sublease share. Availability well above vacancy means more space can still reach the market.
- Port volume. A sustained run would support leasing. A pullback would test it.
- Retail cap rates. Widening cap rates alongside falling vacancy is a gap that eventually closes one way or the other.
Sources: CBRE, Inland Empire Industrial Figures Q2 2026; Kidder Mathews, Inland Empire Industrial (Q2 2026), Office (Q2 2026) and Retail (Q3 2026) market reports; Cushman & Wakefield, Inland Empire MarketBeat; Lee & Associates, Q2 2026 Ports of LA-Long Beach to Inland Empire Industrial Market Report; Commercial Observer, Aug. 21, 2026. Rents are asking or taking rents as labeled. Vacancy definitions differ by firm.