Riverside-San Bernardino Retail Investment Forecast
Robust Population Expansion and Record Headcounts Elicit Heightened Demand for Inland Empire Retail
Region leads state in leasing velocity. Population growth in Riverside-San Bernardino substantially outstripped all other major California markets last year, boosting local consumer spending and motivating necessity-based merchants to expand. During the 12-month window, vacancy fell by 100 basis points on net absorption of nearly 2.2 million square feet, while availability rose or was unchanged across every other market statewide. Moving forward, the Inland Empire's lower cost of living, as well as expanding industrial and health sectors, will continue to draw new residents to the region, with the local populace expected to expand by more than 200,000 residents over the next five years. This projected growth represents the elixir for positive, near-term leasing momentum, as the region historically attracts only a moderate volume of tourists. Discount stores and home goods related vendors are positioned to lead the way, evidenced by Crazy Boss Big Discount Store, At Home, and Floor & Decor all recently committing to big-box space. Additional midsize and large-scale leases during a year of sub-1 percent inventory growth have the potential to lower vacancy to its tightest rate since 2007.