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Inland Empire's High-Clearance Logistics Demand
By Richard Berger | June 24, 2026 | GlobeST
The Inland Empire is seeing relentless demand for high-clearance logistics space along the I-215 corridor, especially. That's exemplified by Southwest Traders' $40.5 million purchase of Gateway at Menifee, a 229,934-square-foot industrial facility at 33520 Zeiders Road that was sold by Scott Road Property, LLC, according to Colliers, which executed the deal.
The deal moved at an accelerated pace, with escrow opening in May 2026, and both parties executed a quick close, underscoring the strategic importance of the acquisition. Colliers Executive Vice President Rick Nunez of SIOR and Associate Mateo Mobilia represented the seller and Senior Client Services Specialist Michael Romero represented the buyer.
Under the rapid sale, the buyer needed to complete the required tenant improvements to be fully operational to service a large new national client contract, Nunez told GlobeSt.com.
"It's not very often that deals of this size transact this quickly," Nunez said. "Making things happen so quickly required the focus of both the buyer and seller, as well as assembling a great team to execute.
This included everyone from the title company, engineers, appraisers, environmental consultants, construction contractors and the lender.
"The building's location and features, including the large, secure yard, made it a great option," according to Nunez.
The asset in the sale is Building 3 within the five-building industrial complex, formerly known as Scott Road Commerce Center.
Terry Walsh, president of Southwest Traders, said in a release that the Menifee facility represents a critical next step in his firm's growth strategy, enabling it to scale its operations and expand its regional logistics footprint.
Walsh said he plans to invest approximately $25 million to retrofit a portion of the building into a refrigerated distribution center.
Meanwhile, the Inland Empire's industrial market in Q1 showed a combination of moderating capital-markets activity and gradually stabilizing fundamentals, with each of the major brokerage sources providing a slightly different lens on the quarter.
Avison Young reported that industrial investment volume reached $553.9 million across 48 transactions, noting that this level reflects a normalization of activity rather than a demand reset.
The firm emphasized that institutional capital began re-engaging as interest rates and inflation stabilized.
NAI Capital reported a lower total sales volume of $381.6 million, likely reflecting differences in tracked deal sizes and geographies and highlighted that falling vacancy and renewed leasing momentum supported buyer confidence even as pricing recalibrated.
Cushman & Wakefield stated that the region's vacancy rate reached 8.5 percent, driven largely by four move-outs exceeding one million square feet each, which produced negative 3.4 million square feet of net absorption during the quarter.
Savills reported a slightly higher 9.9 percent vacancy rate and negative absorption of 2.3 million square feet, reinforcing the narrative that large blocks of space returned to the market even as tenant demand remained active.
Inland Empire Industrial Rents Decline from Peak
Along with elevated availability, asking rents continued to decline from their peak, with Avison Young citing an average of $1.01 per square foot, down 35.7 percent from 2023, while NAI Capital reported 95 cents per square foot, a 7.8 percent year-over-year decrease.
Leasing activity strengthened meaningfully, with CBRE reporting 13.6 million square feet of new leasing, a 40 percent increase quarter‑over‑quarter, supported by major commitments from Medline, Tireco and Custom Goods.
This uptick in leasing helped narrow the pricing gap between buyers and sellers, thereby supporting transaction velocity. Avison Young also noted that Walmart's owner‑user acquisition in Riverside served as one of the quarter's anchor transactions, signaling that large corporate users remain willing to deploy capital for strategic facilities.
Taken together, these sources show that Q1 industrial sales in the Inland Empire were shaped by a recovering capital-markets environment, a temporary drag from large tenant move-outs and improving leasing fundamentals that helped stabilize investor sentiment.
Small Bay Now Dominates Industrial
By Philippa Maister | May 14, 2026 | GlobeST
At a time of uncertainty when commercial real estate is still struggling to find firm footing, light industrial – especially the small-bay segment -- remains one of the most fundamentally sound and operationally resilient asset classes in the market, according to a new report from BKM Capital Partners.
The report emphasized the widening gap between small-bay and large industrial product in many areas -- from availability and rental growth to leasing demand and investor interest.
"Multi-tenant light industrial properties continue to outperform larger warehouse product across nearly every key metric—from availability and rental growth to leasing demand and investor interest," BKM stated in its Q1 2026 Light Industrial Market Update.
"Demand remains firmly concentrated in the small-bay segment, where tenants continue to prioritize flexibility, infill proximity, and operational efficiency."
Transactions under $100 million represented 73% of total industrial sales in 2025, well above the long-term average of 62%, as capital flowed in. Industrial sales volume surged 11% year-over-year to $91.3 billion.
Also, mergers and acquisitions picked up as some new entrants into the small-bay market discovered that its operational profile was different from bulk industrial, noted Brian Malliet, founder and CEO of BKM.
"As the cycle has tightened, the gap between disciplined operators and recent entrants has become hard to ignore, and consolidation was the natural result," Malliet said.
The report noted that facilities under 100,000 square feet have less availability and higher leasing rates than their bigger rivals -- but supply and new construction are limited. The 4.9% average vacancy for buildings under 100K square feet was half the rate for buildings over that limit. Just 7% of new buildings under construction had less than 50,000 square feet.
BKM also cited a shift in the U.S. economy toward HALO businesses -- Heavy Asset, Low Obsolescence companies that enhance the prospects for light industrial real estate and have attracted significant investment. Some examples are electrical contractors, HVAC services and specialty manufacturers.
"These HALO businesses reinforce a core demand driver of multi-tenant light industrial, increasing the need for functional space," the report said.
BKM also highlighted other factors that it said contribute to the promise of the small-bay sector for investors. It cited a 21% rate premium for properties under 150,000 square feet compared to larger ones. Leases under 50,000 square feet accounted for 80% of all industrial leasing activity in Q4 2025. The quarter also saw 62 million square feet of net absorption nationwide – especially in cities like Dallas-Fort Worth, Houston and Phoenix.
Changes in the makeup of the economy, as technology has evolved, have played another big role in driving demand for light industrial space. E-commerce is one example, along with others.
"Technologies such as 3D printing reduce labor requirements, eliminate complex assembly processes, and lower setup costs, allowing businesses to operate within smaller, more adaptable footprints," the report commented.
"As a result, demand for small-bay industrial product continues to grow, particularly among technology-driven manufacturers, logistics users, and light production tenants seeking scalable, infill space."
Other changes will be brought about by AI-enabled micro-fulfillment centers that are expected to drive demand for small-bay product through extensive infill supply chain networks. Plus, demand is anticipated to come from the expansion of manufacturing employment for smaller industrial facilities near major manufacturing hubs.
Inland Markets Are Now Leading Industrial Growth
By Kristen Smithberg | March 24, 2026 | GlobeST
The U.S. industrial landscape is undergoing a major reshaping, with logistics users moving large-scale distribution away from coastal gateways and into lower-cost inland hubs, according to new research from Cushman & Wakefield. Port-proximate markets captured just 19% of total U.S. net absorption in 2025, their lowest share in 15 years, marking a significant departure from long-standing coastal-focused strategies.
Overall, industrial net absorption rose 16.3% year-over-year, but inland markets outpaced their coastal counterparts. Inland hubs recorded 21% growth in demand, compared with just 2% for port-adjacent markets.
"Industrial occupiers are redesigning logistics networks around cost, resilience, and flexibility," Jason Price, Americas Head of Logistics & Industrial Research at Cushman & Wakefield.
"Port proximity remains important for speed-to-market and cross-dock functions, but large-scale distribution activity is increasingly shifting inland where occupiers can access lower costs, more land, and modern facilities."
Rising costs in coastal markets are accelerating the shift, the report noted. Industrial rents at port hubs climbed 65% between 2019 and 2023 and remain roughly 33% above the national average. For occupiers seeking facilities larger than 500,000 square feet, inland locations offer a more viable path to scale.
Global trade dynamics are also reshaping industrial demand. Imports from China fell roughly 30% year-over-year in 2025 as companies diversified sourcing to Southeast Asia and Mexico to reduce tariff exposure and supply-chain risk. Mexico, the U.S.'s largest trading partner, exported $534 billion in goods last year, much of it moving through land ports such as Laredo and El Paso, feeding inland logistics corridors tied to major population centers, the report said.
Despite the inland surge, port markets remain relevant. Cargo volumes at the nation's 10 largest maritime ports declined just 0.3% last year, underscoring their continued role in global trade. Cushman & Wakefield expects demand in many port markets to stabilize as development pipelines shrink and supply-chain strategies continue to evolve.
"Port markets remain strategically important, but investors and occupiers are becoming far more selective," Price said.
"Building quality, infrastructure access, and proximity to population centers increasingly matter more than simply being located near a port."
The report concludes that while trade policy uncertainty may create short-term volatility, the long-term fundamentals supporting industrial real estate demand remain intact, particularly for modern logistics facilities that support automation, AI-enabled operations and high-throughput distribution.
