Inland Empire Shows Strength
Backed by a booming industrial market, the metro added 48,000 jobs in the 12 months ending in July. Apartment deliveries have been slow throughout the cycle, but that is likely to increase as demand continues to push rents higher.
By Alex Girda
Inland Empire rent evolution, click to enlarge
Riverside and San Bernardino counties continued to grow in the first half of 2017, adding jobs at some of the strongest rates in California. Although the sectors with the bulk of growth encompass mostly lower-paying jobs, demand for housing and a tepid rate of multifamily development pushed rent growth to 4.7 percent year-over-year as of July. Even with nearly 2,000 units projected to come online by year-end, average occupancy will most likely remain above the 96.0 percent mark.
Backed by a booming industrial market, the Inland Empire’s economy added 48,000 jobs in the 12 months ending in July. Freighting in the nearby ports of Los Angeles and Long Beach was up in 2016. At the same time, the continued rise of e-commerce has helped increase demand for warehouse space. Logistics is the main driver of economic activity in the two counties, pushing industrial construction activity to historic highs.
Apartment deliveries have been slow throughout the cycle, but there were 3,300 units underway as of July, and that is likely to increase as demand continues to push rents higher. Developers are adding units in the immediate vicinity of the two counties’ urban cores, which offer proximity to East Los Angeles County, attracting an influx of commuters looking for more affordable rents. With fewer than 2,000 units slated for completion this year, we expect rents to improve by 6.1 percent in 2017, one of the highest rates among major U.S. metros.
