Inland Empire Commercial Office Space for Rent

Q1 2026

Inland Empire Commercial Real Estate Market Report

Focus: Q1 2026 Market Trends

Executive Summary

The Inland Empire commercial real estate (CRE) market is navigating a dynamic Q1 2026, driven heavily by regional demographic shifts and the absorption of pandemic-era construction [1], [2]. The Office sector continues to be a surprising national standout, boasting one of the lowest vacancy rates among major U.S. markets due to robust demand from population-serving businesses rather than corporate headquarters [1], [3]. Industrial fundamentals are experiencing a significant recalibration; a historic wave of new completions has pushed vacancy to a multi-year high, temporarily shifting leverage to tenants as sublease space peaks [2], [4]. Retail remains fundamentally tight, buoyed by consistent population in-migration and strong demand for second-generation space amid elevated construction costs [5]. Meanwhile, the Multifamily market remains highly resilient, absorbing new supply efficiently as renters continue to flee higher-cost coastal markets like Los Angeles and Orange County [6].

TenantBase Proprietary Data highlights the distribution of active tenant demand over the last 90 days:

  • Retail/Storefront dominated market activity with 50.87% of all searches.
  • Warehouse was the second most active sector at 39.74%.
  • Office accounted for 9.83% of total search volume.

Office Market

Market Overview The Inland Empire office market has bucked national distress trends in Q1 2026, benefiting from an influx of residents and businesses fleeing high expenses in nearby coastal markets [1].

  • Vacancy & Availability: Vacancy has fallen to a highly constrained 4.8%, making the Inland Empire the tightest office market among the nation's 50 largest metros [1].
  • Demand Drivers: Leasing is not driven by large tech firms, but rather by healthcare, government agencies, and local professional services that require a consistent in-person presence [3].
  • Rental Rates: The market offers a highly affordable alternative to coastal hubs, with average asking rents resting around $2.45 per SF (Full Service Gross), representing a roughly 40% discount compared to Los Angeles [1], [3].

TenantBase Activity

  • Demand Share: Office accounted for 9.83% of total search volume.
  • Lease Term Preference: Tenant demand is spread across both short and mid-term options, led by 3-5 Years (35.90%), with Less than one year and 2-3 Years tying at 23.08% each.
  • Size Requirements: Space requirements scale dramatically for longer commitments. The average lower-bound requirement for a 5+ Year term is 600% larger than the requirement for short-term leases of Less than one year.

Industrial & Warehouse Market

Market Overview The Inland Empire industrial market is absorbing a massive development cycle in early 2026, providing tenants with unprecedented options and leverage [2], [4].

  • Supply & Vacancy: Nearly 60 million SF of new space has been completed since 2023, pushing Q1 2026 vacancy up to 8.7% and overall availability to a 13-year high of 11.9% [4].
  • Sublease Availability: Companies actively reducing excess footprint have pushed available sublease space to a new all-time high of over 17.4 to 20.2 million SF [2], [7].
  • Rental Rates & Concessions: Average asking rents have reached a floor at approximately $1.00 to $1.36 PSF NNN, sitting roughly 23% below their 2023 peak [2], [4]. Landlords are heavily utilizing concessions, including months of free rent, to secure 5+ year commitments [4].

TenantBase Activity

  • Demand Share: Warehouse accounted for 39.74% of total search volume.
  • Lease Term Preference: Industrial tenant demand strongly favors the front half of the curve, led by 1-2 Years (34.74%) and 2-3 Years (27.37%).
  • Size Requirements: Industrial size requirements scale steadily with term length. The average lower-bound space requirement for 5+ Year terms is approximately 234% larger than the requirement for 1-2 Year terms.

Retail Market

Market Overview Retail remains a stabilizing force in the Inland Empire in Q1 2026, benefiting from strong demographic tailwinds and disciplined development pipelines [5].

  • Vacancy & Demand: Overall vacancy rests near 6.8% to 7.1%. Demand is firmly anchored by expanding grocery and discount brands (e.g., Aldi, Dollar General) backfilling second-generation spaces left by legacy big-box closures [5], [8].
  • Rental Rates: Rents remain stable despite elevated operating costs for tenants, averaging around $1.70 to $1.77 per SF NNN [5], [8].
  • Consumer Migration: Population surges in more affordable cities like Coachella, Menifee, and Victorville are driving targeted new retail development to serve these under-retailed communities [9].

TenantBase Activity

  • Demand Share: Retail/Storefront activity dominated the Inland Empire market with 50.87% of all search volume.
  • Lease Term Preference: Retail tenants display an incredibly balanced and widely distributed preference for commitment horizons:
    • 3-5 Years: 25.23% of searches.
    • 5+ Years: 24.30% of searches.
    • 1-2 Years: 18.69% of searches.
    • Less than one year: 17.76% of searches.
  • Top Locations: Tenant interest is heavily concentrated in key logistics and population hubs. Out of the most frequently requested submarkets, Riverside captured approximately 17.68% of the interest, followed by Rancho Cucamonga (8.54%), and Corona and Murrieta (each capturing 7.93%).

Multifamily Market

Market Overview The Inland Empire multifamily sector is performing exceptionally well in Q1 2026, driven by an ongoing exodus of renters from coastal California seeking affordability [6].

  • Vacancy & Rent: Vacancy remains tight between 4.6% and 5.6%, signaling healthy absorption despite new housing supply [6], [10]. Rent growth has stabilized into a sustainable 2% to 3.5% annual range, pushing average monthly rents to over $2,050 [6], [10].
  • Development Contrast: While much of Southern California has seen a sharp pullback in new apartment starts due to capital constraints, the Inland Empire recently recorded a massive 65% jump in new permit activity, indicating developers are aggressively chasing the region's population growth [11].

2026 Outlook

Moving further into 2026, the Inland Empire CRE market is positioned for continued stabilization as supply normalizes.

  • Office Resilience: With virtually no new speculative construction underway and a steady influx of medical and government tenants, the Inland Empire office market will likely maintain its status as the tightest in the nation throughout 2026 [1], [3].
  • Industrial Rebound: Construction starts have plummeted. As inbound cargo volumes at the Ports of Los Angeles and Long Beach remain positive, this dramatic drop in future supply additions foreshadows a tightening of vacancy and eventual rent recovery by late 2026 or early 2027 [2], [4].
  • Multifamily Stability: With affordability relative to coastal markets remaining the primary demand driver, landlords can expect sustainable, low-single-digit rent growth, though strategic and competitive pricing will be required to prevent extended unit downtimes [6].

Sources

  1. Riverside County Economic Development: Inland Empire Office Market Report Q1 2026
  2. NAI Capital: Inland Empire's Industrial Market Surges with a New All-Time High in Sublease Space Q1 2026
  3. Apex Real Estate Services: Inland Empire Office Market 2026 Forecast
  4. Riverside County Economic Development: Inland Empire Industrial Market Report Q1 2026
  5. NAI Capital: Inland Empire Retail Market Outlook Q1 2026
  6. Mesa Properties: Current Rental Vacancy Rates in the Inland Empire 2026
  7. Newmark: Inland Empire Industrial Market Reports 2026
  8. CBRE: Inland Empire Retail Figures
  9. NAI Capital: Inland Empire Retail Market Sees Steady Growth
  10. NAI Capital: Inland Empire Multifamily Market Fundamentals
  11. Globe St / Kingsbarn: Apartment Construction Cools in California Markets Q1 2026
  12. TenantBase Proprietary Market Data (Dashboard Export: SEO Market Reports)

Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.