The Inland Empire industrial market is flashing a major warning sign. For the first time in recent memory, negative net absorption crossed 1.35 million square feet in a single quarter, pushing overall vacancy up to 8.94%—the highest level seen in over 13 years. Space is returning to the market faster than tenants can take it down. But if you think the entire market is collapsing, you’re looking at the wrong data. Behind the headline numbers lies a massive historic divergence. While mid-sized buildings between 100k and 250k square feet face a brutal 14% availability rate, the mega-warehouse segment (500k+ SF) in the West just exploded with 2.9 million square feet of positive net absorption driven by major moves from Amazon and TikTok. It is a complete tale of two markets. Joining host Shy Assar on this episode of Adding Value is Tim Pimentel, Vice Chair at Cushman & Wakefield. Having executed over 65 million square feet of transactions throughout his career, Tim brings institutional insight into what’s happening on the ground, how Asian sovereign 3PLs are changing tenant dynamics, where lease rates are actually settling across the East and West, and why we may finally be touching the bottom of the cycle.
00:00 - Intro & Macro Overview: Highest Vacancy in 13 Years
02:15 - Tale of Two Markets: Mega Big Box vs. Mid-Sized Contraction
05:10 - The Impact of Expiations: 5-Year Leases Rolling Off COVID Peaks
08:30 - Inland Empire West (100k–250k SF): Case Study & Security Deposits
12:45 - Monetary Policy, M2 Supply, & Corporate Downsizing Realities
15:20 - Efulfill Deal Deep Dive: $1.21 Gross & Racking Solutions in Fontana
18:50 - How Gen Z/Millennial Shopping & TikTok Drive Modern 3PL Expansion
22:15 - Class A vs. Class B Divergence in the 500k+ SF Segment
26:40 - Are Developers Just Building and Waiting for Amazon?
31:10 - Inland Empire East Breakdown: Labor Dynamics & Rate Compression
36:00 - BFG Supply Case Study: Securing an 82¢ Net Deal in San Bernardino
40:25 - The 800k SF Comar Deal: Custom Build-to-Suit Features & Purchase Rights
45:10 - California Business Climate vs. Out-of-State Migration (Phoenix/Vegas)
48:30 - Brokerage Strategy: Servicing Clients & Communicating Through Soft Markets
52:15 - Have We Bottomed Out? Historical Trend Line Analysis & Final Thoughts