What This Means for Shippers
The chain runs from expected ocean rate increases (GRI notices of $300-$500/FEU effective July 1) to shippers front-loading inventory earlier than usual, to compressed vacancy in large-format distribution buildings, to higher asking rates and waitlists for short-term overflow space. Shippers who wait until the traditional July-August leasing window will be negotiating against a tighter market than in prior years, with less leverage on short-term (3-6 month) terms.
| Submarket Metric | Early Q2 | Current |
|---|---|---|
| Class A asking rate (per sq ft/month, NNN) | $0.72 - $0.85 | $0.78 - $0.92 |
| Vacancy (250,000+ sq ft buildings) | ~7.5% | ~5.8% |
| Short-term (3-6 mo) overflow availability | Available | Waitlisted at several 3PLs |
Leasing data calibrated against independent field data shows the rate increase from the $0.72-$0.85 range to $0.78-$0.92 tracks directly with the vacancy compression in large-format buildings, and industry trade reporting confirms several 3PL operators are now quoting premium rates for last-minute short-term requests.
Why are Inland Empire warehouse rates rising now, ahead of the usual peak?
Shippers are pre-positioning peak season inventory earlier than typical, anticipating GRI-driven ocean rate increases on Asia-West Coast lanes effective July 1. That earlier demand has compressed vacancy in buildings over 250,000 square feet to roughly 5.8%, from approximately 7.5% in early Q2, and asking rates have moved up correspondingly.
Is the rate increase concentrated in any particular building size?
Yes, the vacancy compression is most pronounced in buildings over 250,000 square feet, the size class most used for overflow and short-term peak-season storage. Several 3PL operators report waitlists specifically for short-term (3-6 month) space in this category, while smaller-format space has not seen the same pressure.
What Shippers Should Do
- Begin space negotiations now for any anticipated Q3 overflow storage needs.
- Expect short-term (3-6 month) space to be harder to secure on favorable terms going forward.
- Lock in space before the typical July-August demand spike to avoid premium short-term rates 3PLs are beginning to quote.
- Budget for the $0.78-$0.92/sq ft range as the current baseline rather than the earlier $0.72-$0.85 range.