Inland Empire Retail Market Brief: What Investors Should Know Heading into 2027

Last updated: November 13, 2026  ·  By Brandon Lehman, Managing Partner, West Hive Capital

The Inland Empire posted the strongest retail absorption in Southern California in the third quarter of 2026. Vacancy fell, rents rose and new supply stayed modest. This brief walks through what the public reports say, why the numbers differ and what an investor should examine in a center there. It is education only.

What is happening in the Inland Empire retail market right now?

Demand is outpacing new supply. Commercial Observer reported on October 19, 2026 that Colliers found Inland Empire vacancy fell 30 basis points to 6.9 percent, with 527,000 square feet of positive net absorption, the most in the region.

Other firms see the same direction. CBRE reported that net absorption rebounded to 501,000 square feet after a loss of 65,000 square feet in the second quarter, and that all seven of its submarkets posted positive absorption. Kidder Mathews reported 402,499 square feet and noted year to date absorption of 1,245,186 square feet, against a negative 408,751 square feet for the same period of 2025.

Why do Inland Empire vacancy numbers differ between reports?

The numbers differ because each firm defines the market, the buildings it tracks and the measure itself in its own way. The table below shows the third quarter of 2026 readings. CBRE reports availability, which is a different measure from vacancy.

Source	Measure	Q3 2026 reading	Net absorption
Colliers	Vacancy	6.9 percent	527,000 SF
CBRE	Availability	6.7 percent	501,000 SF
Kidder Mathews	Vacancy	6.0 percent	402,499 SF
Matthews	Vacancy	6.0 percent	543,000 SF

Sources: Commercial Observer (Colliers), CBRE, Kidder Mathews and Matthews third quarter 2026 reports. SF means square feet.

Marcus and Millichap placed Riverside San Bernardino vacancy at 7.1 percent and described that level as 70 basis points below the market long term average. The takeaway for an investor is simple: always ask which definition a number uses.

What is driving neighborhood retail demand in the Inland Empire?

Neighborhood and community centers are a main driver of leasing and absorption. Colliers found these formats accounted for about 276,000 square feet of Inland Empire absorption in the third quarter, according to Commercial Observer.

Population and housing growth supply the customer base. The California Department of Finance reported that Riverside County reached 2,506,824 residents on January 1, 2026, up 0.4 percent, and San Bernardino County reached 2,216,685, up 0.1 percent. Together that is about 4.7 million people. Riverside County also added housing at a 1.2 percent pace to 904,277 units, which ranked eighth fastest among California counties. The same release said most county population growth in the state was in the Central Valley and the Inland Empire.

The Department of Finance also reported that California as a whole lost 0.14 percent of its population in 2025, so Inland Empire growth is modest. More households within a short drive support daily needs tenants, such as food, services and medical users. That is a general observation, not a claim about any one center.

How much new retail is being built in the Inland Empire?

New retail construction is measured against absorption, and the reports show a limited pipeline. Colliers counted about 733,000 square feet under construction in the Inland Empire, the largest share of the region. Kidder Mathews counted 1,104,779 square feet under construction, down 10.39 percent from a year earlier, using its own definitions.

Matthews put deliveries at 182,000 square feet in the third quarter, 29 percent below the same quarter of 2025. It found that space under construction equals 0.5 percent of inventory, and that annual deliveries peaked at 7.84 million square feet in 2007. For an investor, a thin pipeline means less new competition for existing centers.

How does the Inland Empire compare with Orange County and Los Angeles?

The Inland Empire has more vacancy and lower rents than Orange County, and it has stronger recent absorption than Los Angeles County. Colliers data from the Commercial Observer article shows the contrast:

• Orange County: vacancy of 3.55 percent, a five year low, asking rent of $2.65 and absorption of 180,000 square feet.
• Los Angeles County: vacancy of 6.67 percent, asking rent of $2.62 and absorption of just 50,000 square feet.
• Inland Empire: vacancy of 6.9 percent, asking rent of $1.88 and absorption of 527,000 square feet.

The Department of Finance reported that Orange County lost 0.4 percent of its population and Los Angeles County lost 0.6 percent in 2025, while Riverside County grew. Our related pieces cover the Orange County strip center market and why good OC retail stays leased.

What should an investor look at in an Inland Empire center?

An investor should look at four things first: trade area, parking, tenant mix and lease rollover. Our investment thesis and acquisition playbook describe how we think about diligence in general terms.

• Trade area: count households within a short drive, review nearby housing growth and note competing centers. County growth does not ensure demand at one corner.
• Parking: check stall counts against the tenant mix, how the lot flows at peak hours and whether drive up and quick service users strain it.
• Tenant mix: look for a spread of daily needs, food and service users. Avoid heavy reliance on one type of spending.
• Lease rollover: map expirations by year and compare in place rents with current asking rents. With asking rents rising, as CBRE reported at $1.77 NNN, in place rents may sit above or below the market.

Reported rents differ by source, at $1.88 from Colliers and $1.77 from CBRE and Kidder Mathews, so use local comparables.

FAQ: How Is the Inland Empire Retail Market Doing?

Is Inland Empire retail vacancy higher than Orange County?
Yes. Colliers reported Inland Empire retail vacancy of 6.9 percent in the third quarter of 2026, compared with 3.55 percent in Orange County and 6.67 percent in Los Angeles County. Asking rents also differ, at $1.88 per square foot per month in the Inland Empire and $2.65 in Orange County.

Why do Inland Empire retail vacancy rates differ between reports?
Each firm defines the market, the property types and the vacancy measure in its own way. For the third quarter of 2026, Kidder Mathews and Matthews both reported 6.0 percent, Colliers reported 6.9 percent and Marcus and Millichap reported 7.1 percent for the metro.

What should an investor check first in an Inland Empire strip center?
Start with the trade area, then parking, tenant mix and lease rollover. Confirm the nearby household base, review how the lot works for daily visits, check how many tenants rely on the same type of spending and map when leases expire.

If you are a family office, co GP or accredited investor who wants to learn more about how West Hive Capital approaches neighborhood retail, connect with our team.

This article is for educational purposes only and is not an offer to sell or a solicitation of an offer to buy any security. Any offering is made only through confidential offering documents to qualified investors.