Headwinds to Inland Empire retail space demand

The retail sector in California's Inland Empire is experiencing a notable rise in space availability and vacancy rates, driven by a confluence of factors including major retailer closures, shifting consumer behaviors and a slower economy. As of early September, retail availability across the market has expanded to 6.9%, up over 100 basis points since the end of 2022. The increase in available space underscores shifting consumer behaviors, with negative absorption observed throughout 2024 and into the first half of 2025.