Rent Spikes and strong market fundamentals in the IE are fueling strong multifamily sales velocity.
1) Inland Empire Market Fundamentals Are STRONG
- The Inland Empire multifamily market concluded a year of rapid improvement in 2021 with additional strengthening in the fourth quarter. Vacancy tightened and rents rose. The improving market fundamentals fueled accelerating investment activity and steep
per-unit price appreciation.
- Multifamily vacancies tightened in 2021 to around 3%
- Asking rents reached a record high during the fourth quarter 2021 averaging $1,729/month which represents roughly an 18% year-over-year increase
- The investment market strengthened throughout 2021 with cap rate compression fueled by investor demand.
2) Inland Empire Employment Numbers Continue to Grow
- There is incredibly strong rent growth in the Inland Empire with more than 65,000 jobs added in 2021 representing an increase of over 4% from the prior year.
- Many of the jobs added were in the trade, transportation and utilities sector. The IE continues to be one of the best-performing industrial hubs in the nation.
- Employers are expected to expand payrolls by nearly 3% in the coming year, adding approximately 46,000 jobs.
3) New Multifamily Developments are on the Way
- Close to 4,000 multifamily units were earmarked as ‘under construction’ at year end 2021 which was triple the amount at the same time in 2020.
- Permitting spiked during the final quarter of 2021 as developers permits for more than 1,700 multifamily units in the final few months of 2021.