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Q2 2026

Q2 2026 Inland Empire Commercial Real Estate Market Report

Focus: Q2 2026 Market Trends

Executive Summary

The Inland Empire commercial real estate (CRE) market is navigating a dynamic Q2 2026, driven heavily by regional demographic shifts and the continuing stabilization of pandemic-era industrial inventory.[1] The Office sector stands as a surprising regional outlier within Southern California, maintaining single-digit vacancy rates due to robust demand from population-serving small businesses, healthcare entities, and local services rather than corporate headquarters.[2] Industrial fundamentals are undergoing a necessary recalibration; following a historic multi-year wave of completions, vacancy has flattened near 8.5% to 8.7%, temporarily leaning leverage toward tenants while construction pipelines drop to decade lows.[1, 2] Retail remains structurally tight, buoyed by consistent residential in-migration and steady backfilling of high-quality second-generation locations.[1] Meanwhile, the Multifamily market remains resilient, efficiently integrating recent supply additions as suburban renters prioritize the area's relative affordability.[1]

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

• Storefront/Retail dominated localized transaction activity with 53.17% of all searches (235 deals).[3]
• Warehouse was the second most active sector at 40.05% of demand (177 deals).[3]
• Office accounted for 8.14% of total search volume (36 deals).[3]

Office Market

Market Overview

The Inland Empire office market continues to buck broader national distress trends in Q2 2026, capturing sustained requirements from local professionals and operations expanding alongside the region's expanding consumer base.[2]

• Vacancy & Availability: Local vacancy measures firmly between 4.8% and 6.1% across core submarkets.[2] This reinforces the Inland Empire's position as the only metropolitan region in Southern California maintaining single-digit vacancy.[2]
• Demand Drivers: Traditional technology headquarters are sparse; instead, leasing velocity remains securely anchored by medical office expansions, healthcare networks, localized public service agencies, and educational providers.[2]
• Rental Rates: Average direct asking rates hold resilient near $2.23 to $2.45 per SF per month on a full-service gross basis, presenting an affordable alternative that continues to pull tenants out of high-cost coastal environments like Los Angeles.[2]

TenantBase Activity

• Demand Share: Office accounted for 8.14% of total search volume (36 deals).[3]
• Lease Term Preference: Demand heavily favors short-term programmatic flexibility, with immediate transaction horizons dominating local deal activity:[3]
  
  • Less than one year: 51.72% of deals (15 deals).[3]
  • 2-3 Years: 20.69% of deals (6 deals).[3]
  • 5+ Years: 20.69% of deals (6 deals).[3]
  • 1-2 Years: 3.45% of deals (1 deal).[3]
  • 3-5 Years: 3.45% of deals (1 deal).[3]
• Size Requirements: Floor area requirements scale dramatically alongside lease duration thresholds.[3] Short-term commitments of less than one year requested an average lower boundary of 600.00 SF up to an upper bound of 1,300.00 SF.[3] Long-term occupiers committing to 5+ Year terms require substantial footprints, averaging a lower limit of 15,000.00 SF and scaling to an average upper capacity of 35,000.00 SF.[3]

Industrial & Warehouse Market

Market Overview

The Inland Empire industrial landscape is adjusting to a major development peak, providing small-to-large corporate logistics operators with an influx of functional space choices.[1]

• Supply & Rebalancing: Over 60 million SF of supply completions delivered since 2023 has pushed direct overall market vacancy to a multi-year high of 8.5% to 8.7%, while broad availability indexes hold near 11.9%.[1, 2]
• Pipeline Contraction: The developer supply wave has effectively ended.[1, 2] Active construction pipelines have collapsed from their historic 40.6 million SF peak down to just 3.3 million SF, clearing a path for tenant move-ins to systematically reduce available blocks of space.[2]
• Concession Pricing: Market direct asking rents average approximately $1.02 to $1.05 per SF NNN monthly.[2] To defend occupancy across large big-box developments over 250,000 SF, landlords are frequently offering free rent concessions for stable 5+ year commitments.[1]

TenantBase Activity

• Demand Share: Warehouse represented 40.05% of total search volume (177 deals).[3]
• Lease Term Preference: In contrast to institutional big-box deals, mid-tier warehouse demand remains focused across front-and-mid-curve durations:[3]
  
  • 2-3 Years: 37.50% of deals (30 deals).[3]
  • 3-5 Years: 22.50% of deals (18 deals).[3]
  • 1-2 Years: 20.00% of deals (16 deals).[3]
  • Less than one year: 11.25% of deals (9 deals).[3]
  • 5+ Years: 8.75% of deals (7 deals).[3]
• Size Requirements: Operational space needs expand relative to commitment longevity.[3] Shorter-term 1-2 Year commitments tracked a lower bound average of 3,250.00 SF, while standard mid-term commitments for 2-3 Years scaled to an average lower bound footprint of 5,050.00 SF and reached an average upper capacity of 16,136.36 SF.[3]

Retail Market

Market Overview

Retail is serving as a major stabilizing force across Riverside and San Bernardino counties, heavily insulated by disciplined building pipelines and robust household base growth.[1]

• Vacancy & Demand: Overall retail vacancy stays balanced near 6.8% to 7.1%, characterized by rapid landlord backfilling as grocery operators, discount brands, and service-oriented anchors absorb vacated second-generation boxes.[1]
• Rental Rates: Retail asking lease rates hold stable, hovering comfortably around $1.70 to $1.77 per SF NNN monthly despite elevated build-out costs.[1]

TenantBase Activity

• Demand Share: Retail/Storefront activity captured 53.17% of overall metro search volume (235 deals).[3]
• Lease Term Preference: Local retail operators exhibit a healthy, highly uniform commitment horizon across both short and long horizons:[3]
  
  • 3-5 Years: 27.78% of deals (25 deals).[3]
  • 1-2 Years: 21.11% of deals (19 deals).[3]
  • 5+ Years: 21.11% of deals (19 deals).[3]
  • 2-3 Years: 20.00% of deals (18 deals).[3]
  • Less than one year: 10.00% of deals (9 deals).[3]
• Top Locations: Out of the submarkets indicating specific location preferences, active transaction volume concentrated heavily within the following regional clusters (deal counts):[3]
  
  • Riverside: 38 deals.[3]
  • Murrieta: 21 deals.[3]
  • Corona: 16 deals.[3]
  • Ontario and San Bernardino: 9 deals each.[3]
  • Chino and Temecula: 8 deals each.[3]

Multifamily Market

Market Overview

The Inland Empire multifamily sector continues to demonstrate solid absorption through the midpoint of 2026, benefiting from persistent migration trends.[1]

• Vacancy & Rents: Regional apartment vacancy tracks securely between 4.6% and 5.6%.[1] Stable, single-digit vacancy has preserved baseline landlord pricing power, pushing average monthly rents above $2,050.[1]
• Suburban Affordability: The primary operational engine remains the widening rent delta between the Inland Empire and neighboring coastal hubs, ensuring a reliable stream of budget-conscious workforce households.[1]

2026 Outlook

Moving further into 2026, the Inland Empire CRE market is structurally configured for a phase of low-volatility correction and inventory integration.[1, 2]

• Office Tightness: Absent any new ground-up speculative construction starts, a steady influx of regional medical expansions and consumer professional services will maintain tight single-digit availability metrics.[2]
• Industrial Absorption: With new construction completions falling toward a decade low, a steady clip of modern container volumes processing through the Ports of Los Angeles and Long Beach will allow existing warehouse inventory to steadily compress back toward balanced historical baselines.[1, 2]
• Multifamily Consistency: Affordable cost structures relative to coastal metros will remain a primary driver, fostering low-single-digit rent growth across core submarkets.[1]

Sources

[1] Riverside County Office of Economic Development: Inland Empire Regional CRE Snapshot 2026

[2] Cushman & Wakefield: Inland Empire Industrial & Office MarketBeat Reports Q1/Q2 2026

[3] TenantBase Proprietary Market Data (Dashboard Export: SEO Market Reports inland e, June 29, 2026)

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.