- Vacancy: below 4%, vs. ~5.2% in spring (a decline of more than 1 point)
- Big-box space (500,000+ sq ft): reported as the tightest segment, with multiple brokers noting limited available blocks
- Asking rates on big-box space: up modestly from spring levels, per industry trade reporting on regional leasing activity
- New deal activity concentrated in the eastern Inland Empire submarkets, according to brokerage commentary cited in trade reporting
| Vacancy Band | Market Condition | Leasing Timeline Impact |
|---|---|---|
| Above 6% | Soft | Standard negotiation timelines |
| 4-6% | Balanced | Slight rate firming |
| Below 4% | Tight | Compressed timelines, rate premiums on big-box |
Industry trade reporting on regional leasing activity combined with broker-reported asking rate data suggests the vacancy decline is concentrated in big-box space, while smaller bay configurations (under 100,000 sq ft) have seen more modest tightening. This pattern is consistent with shippers securing peak-season overflow space ahead of the August-September inbound surge.
Why is vacancy falling now, ahead of peak season?
Brokerage commentary cited in industry trade reporting points to shippers locking in big-box distribution space earlier than in prior years, a pattern attributed to concerns about space availability given last year's late-season scramble. The result is that pre-leasing activity typically associated with August is occurring in late June and July instead.
Which submarkets are tightest?
Trade reporting on regional leasing activity identifies the eastern Inland Empire submarkets as the tightest, with limited available blocks above 500,000 square feet. Western submarkets, while also tightening, retain somewhat more availability in mid-size configurations.
Are rates expected to rise further into peak season?
Broker-reported asking rate data shows only modest increases so far, but industry trade reporting suggests rates on big-box space could firm further if vacancy continues toward the 3% range, a level last seen during a prior peak-season cycle that saw more pronounced rate premiums.
What Shippers Should Do
- Shippers with peak-season overflow needs should begin space searches now rather than waiting until August, given the compressed availability in big-box configurations.
- Where flexibility exists, consider mid-size bay configurations in western submarkets, which retain relatively more availability.
- Lock in rate terms before further tightening, particularly for space above 500,000 square feet in eastern submarkets.
- Coordinate lease timing with projected inbound volume to avoid paying for space ahead of need, while still securing it before the market tightens further.