Located in California’s Inland Empire, the Commerce Way warehouse was recently sold for $197 million—one of the area's highest-value transactions. Brokered by the prominent real estate firm JLL, the property transferred from John Hancock Real Estate of Boston to EQT Exeter.
Constructed in 2000, the warehouse at 13423-13473 Santa Ana Ave. is fully leased to Weber Logistics and HSN, highlighting its strategic location. The Inland Empire serves as a critical nexus for national supply chains and a large Southern California population, making it a hotspot for industrial development in the Western U.S.
The industrial real estate market in the Inland Empire is slowing, evidenced by vacancy rates rising from a historic low of 1.3% in mid-2022 to 6.9%, marking seven consecutive quarters of increase. Despite these challenges, the region continues to witness high-value transactions and has constructed over 26 million square feet of industrial space, ranking it fourth nationwide.
Experts predict that the completion of new supply in the area is imminent, but tenant demand is waning, evidenced by a reduction of over two million square feet in leased warehouse space.
Rising costs for materials, labor, and real estate are further complicating the recovery, potentially leading to a sluggish rebound in demand for distribution and storage spaces in Southern California.
Despite a 59% drop in transaction volume from the previous year, Fontana in the Inland Empire executed $4.2 billion in industrial property transactions in 2023, ranking second nationally after Los Angeles. Over the past year, the average industrial rent in the Inland Empire increased by 2.6%, less than in Phoenix (9.9%) and Las Vegas (9.5%), yet exceeding Los Angeles (1.3%).
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