Reviewed by Robert Mendieta Jr., CCIM — Associate Broker · Commercial Division · DRE #01422904
Last updated: October 3, 2026 · Every cap rate below carries its source, period and geography. Market data: Apex’s analysis of CoStar data, Q3 2026.
What Are Inland Empire Industrial Cap Rates in 2026?
Inland Empire industrial cap rates averaged 5.9% on closed sales over the 12 months in CoStar’s Q3 2026 report, with a median of 5.8% and a range of 3.8% to 12.0%. CoStar’s modeled market cap rate is lower, at 4.9%. The 339 deals closed so far in 2026 averaged 6.2%.
4.9%
IE industrial market cap rate
CoStar, Q3 2026
5.9%
12-month average transaction cap rate
CoStar, Q3 2026
5.8%
Median cap rate, 463 sale comps
CoStar, Q3 2026
3.8%–12.0%
12-month transaction range
CoStar, Q3 2026
Key Takeaways
- CoStar, Q3 2026: 4.9% market cap rate; closed sales averaged 5.9%, median 5.8%.
- CoStar’s market cap rate rose from 4.1% in 2022 to 4.8% in 2025; cap rates on logistics sales over $10 million expanded about 150 to 200 basis points.
- No single “good” cap rate: hypothetically, $650,000 of NOI is worth about $13.3 million at 4.9% and $10.8 million at 6.0%.
- Logistics 4.8%, specialized 5.2%, flex 6.2% (CoStar market cap rates, 2026 YTD).
- CoStar forecasts 4.9% for 2026 and 4.8% for 2027 through 2030, with downside risk it flags itself.
Why Does CoStar Show 4.9% and 5.9% at the Same Time?
Because they measure different things. The 5.9% averages the buildings that actually sold; the 4.9% is CoStar’s estimate for every industrial property in the market, sold or not.
CoStar’s footnotes say its transaction figures depend on the mix of what happened to sell, while its market figure reflects estimated price movement for all properties, informed by actual trades. Over the same 12 months the average transaction sold for $204/SF against a $258/SF market sale price: what sold was not a cross-section of the market.
The math is the same for both: cap rate = annual net operating income ÷ purchase price × 100, so value = NOI ÷ cap rate. How to calculate cap rate walks through it, and our glossary defines cap rate and net operating income (NOI).
Watch for “pro forma.” A cap rate can rest on projected income rather than income in place. CoStar’s record of one December 2025 San Bernardino sale lists 5.8% (Pro Forma); its narrative puts the reported year-one pro forma cap rate “in the high 5% range.” Ask which income a number is built on.
How Have Industrial Cap Rates Moved Since 2021, and What About 2026?
They went up. CoStar’s market cap rate rose from 4.2% in 2021 and 4.1% in 2022 to 4.9% so far in 2026, while the closed-deal average moved from 4.8% in 2021 to 5.7% in 2025 and 6.2% so far in 2026.
| Year | Deals | Sales volume | Avg transaction cap rate | CoStar market cap rate |
|---|---|---|---|---|
| 2021 | 942 | $7.3B | 4.8% | 4.2% |
| 2022 | 661 | $6.8B | 5.3% | 4.1% |
| 2023 | 512 | $5B | 4.9% | 4.5% |
| 2024 | 393 | $3.4B | 5.3% | 4.7% |
| 2025 | 425 | $3B | 5.7% | 4.8% |
| 2026 YTD (to Sep 30) | 339 | $3.4B | 6.2% | 4.9% |
| 2026 full year (CoStar forecast) | — | — | — | 4.9% |
| 2027–2030 (CoStar forecast) | — | — | — | 4.8% |
Large logistics trades show the same shift. CoStar reports cap rates on logistics sales over $10 million expanded about 150 to 200 basis points, reaching the mid-5% to 6% range from averages below 4%, while pricing for modern, fully leased institutional-grade logistics buildings has held fairly steady around $250/SF since 2022. Deal flow is accelerating, but only gradually: 425 deals closed in 2025, up from 393 in 2024 yet roughly half the level of more active periods, and sales volume fell for a fourth straight year, to $3 billion in 2025.
Industrial cap rates 2026: what the year so far shows. The 339 deals closed through September 30 averaged 6.2%, up from 5.7% in 2025, while CoStar’s market cap rate edged up to 4.9% from 4.8%. CoStar expects pricing to stay fairly stable in 2026 and begin rising again in 2027, as tightening vacancy lifts rents and cap rates hold stable or lower slightly. It flags downside risk: vacancies in logistics developments have climbed to uncomfortable levels, and higher oil prices threaten consumer spending. We track these figures on our market reports page.
The benchmarkWhat Is a Good Cap Rate for Industrial Property in the Inland Empire?
A good cap rate for industrial property is one that fits the building’s risk against today’s benchmarks, not a single target number. In the Inland Empire those benchmarks are CoStar’s 4.9% market rate, the 5.9% average and 5.8% median on closed sales, and a 3.8% to 12.0% range.
For a seller, a lower cap rate means a higher price for the same income. For a buyer, a higher cap rate means more income per dollar, but a building offered at a cap rate well above the average usually has a reason the underwriting must find. For a fuller valuation approach, see our guide to commercial property valuation in the Inland Empire.
| Cap rate | Benchmark it represents | Value of $650,000 NOI |
|---|---|---|
| 4.9% | CoStar market cap rate, Q3 2026 | ≈ $13.3 million |
| 5.9% | CoStar 12-month transaction average | ≈ $11.0 million |
| 6.0% | Top of CoStar’s mid-5% to 6% range for logistics sales over $10 million | ≈ $10.8 million |
| 12.0% | High end of CoStar’s 12-month range | ≈ $5.42 million |
Why accept a cap rate below the 5.9% average? CoStar says Inland Empire investors have traded upfront yield for total return while waiting to mark in-place rents to market. With the triple-net asking average for available space still about 25% below its 2023 peak, a low cap rate is only “good” if that rent upside is real.
Buying 1031 replacement property in the Inland Empire? Apex underwrites candidates against these benchmarks. Apex is not a law, tax or accounting firm; confirm exchange rules and tax treatment with your attorney or CPA.
By property typeWarehouse Cap Rates vs Specialized and Flex: How Do the Subtypes Compare?
For warehouse cap rates, the closest CoStar subtype is logistics, which carries the lowest market cap rate in the Inland Empire at 4.8%. Specialized industrial sits at 5.2% and flex is highest at 6.2% (CoStar, 2026 year to date as of September 30).
| Subtype | Market cap rate (2026 YTD) | Avg transaction cap rate, 2025 | Avg transaction cap rate, 2026 YTD (deals) | Vacancy, Q3 2026 | Market asking rent ($/SF) |
|---|---|---|---|---|---|
| Logistics (warehouse / distribution) | 4.8% | 5.6% | 5.8% (239) | 9.5% | $0.97 |
| Specialized industrial | 5.2% | 5.7% | 7.5% (68) | 3.9% | $1.33 |
| Flex | 6.2% | 6.4% | 6.2% (32) | 6.2% | $1.55 |
| All industrial (market) | 4.9% | 5.7% | 6.2% (339) | 8.7% | $1.03 |
Closed deals are noisier: specialized industrial deals averaged 5.7% in 2025 but 7.5% so far in 2026, on 68 deals. CoStar does not say why subtypes price differently, so read the table as a benchmark, not cause and effect.
Truck yards are a different asset; see industrial outdoor storage (IOS).
By submarketInland Empire Cap Rates by Submarket, and Riverside County
CoStar’s market cap rates across its 15 Inland Empire industrial submarkets run from 4.7% in Airport Area and Chino/Chino Hills to 6.3% in Coachella Valley. CoStar publishes no county-level figure, so there is no sourced Riverside County cap rate.
| CoStar submarket | Transactions (12 mo) | Market cap rate | Market sale price/SF |
|---|---|---|---|
| Airport Area | 96 | 4.7% | $280 |
| San Bernardino | 63 | 5.0% | $244 |
| Riverside | 52 | 4.9% | $263 |
| Moreno Valley/Perris | 21 | 4.8% | $221 |
| South Riverside | 45 | 5.7% | $252 |
| Chino/Chino Hills | 24 | 4.7% | $284 |
| Corona/Eastvale | 26 | 5.2% | $291 |
| Upland/Montclair | 23 | 5.5% | $308 |
| Coachella Valley | 52 | 6.3% | $246 |
| Redlands/Loma Linda | 7 | 4.8% | $245 |
| Mojave River Valley | 29 | 5.4% | $188 |
| Beaumont/Hemet | 12 | 4.9% | $227 |
| Twentynine Palms | 4 | 5.5% | $204 |
| San Bernardino Outlying | 1 | 5.4% | $190 |
| Riverside Outlying | 2 | 5.5% | $188 |
Two cautions. “Riverside” here is CoStar’s Riverside submarket, not the City or County of Riverside. And some rows rest on very few trades: four in Twentynine Palms, one in San Bernardino Outlying.
If you searched for cap rates Riverside County, read the row for your building’s submarket. As Apex’s own geography note, not a CoStar grouping, submarkets on the Riverside County side include Riverside, Moreno Valley/Perris, Corona/Eastvale, South Riverside, Beaumont/Hemet and Coachella Valley, running from 4.8% to 6.3%. Don’t average them. For lease rates and listings, see our Inland Empire industrial market report. For vacancy and availability by the same submarkets, see our guide to Inland Empire warehouse availability.
Side by sideWhich CoStar Read of Industrial Cap Rates Should You Use?
Match the measure to the question: CoStar’s market rate estimates the whole market, while its transaction average, median and year-to-date figures describe what actually sold. They differ in method, sale set or time window, so never average them.
| CoStar measure | Period · geography | Cap rate | What it measures |
|---|---|---|---|
| Market cap rate | Q3 2026 · IE industrial | 4.9% | Modeled estimate for all properties |
| 12-month transaction average | 12 months to Q3 2026 · IE industrial | 5.9% (3.8% to 12.0%) | 453 closed transactions |
| Median of sale comps | 12 months to Q3 2026 · IE industrial | 5.8% | Middle value of 463 sale comps |
| 2026 year-to-date average | Through Sept. 30, 2026 · IE industrial | 6.2% | 339 closed deals |
| Logistics sales over $10 million | Recent sales · IE logistics | Mid-5% to 6% | Up about 150 to 200 bps from averages below 4% |
For national context, CoStar’s September 2026 report on U.S. bulk distribution says cap rates for bulk distribution buildings nationwide have been gradually declining over the past year, ending the second quarter below 7.5%, and that buildings built after 2020 have typically traded between 5.5% and 7.5%. Those are national figures, not Inland Empire ones, so don’t set them against the rows above.
Locally, CoStar reports that Q2 2026 Inland Empire industrial sales volume was more than double Q2 2025’s, and the $3.4 billion closed through September 30 already tops all of 2025 ($3 billion). For rents, see what warehouse space costs in the Inland Empire.
Across property typesHow Do Inland Empire Cap Rates Compare Between Industrial and Retail?
Industrial prices tighter at the market level: CoStar puts the Inland Empire retail market cap rate at 6.5% against 4.9% for industrial. On closed deals the gap nearly disappears, with retail averaging 6.1% over 12 months against 5.9% for industrial.
| CoStar, Q3 2026 | IE industrial | IE retail |
|---|---|---|
| Market cap rate | 4.9% | 6.5% |
| 12-month transaction average | 5.9% | 6.1% |
| 12-month transaction range | 3.8%–12.0% | 3.2%–14.3% |
Retail’s wider range is the warning: one average can hide very different assets.
What moves the numberWhat Moves an Inland Empire Industrial Cap Rate Up or Down?
Income risk moves it. The 2026 market pressure is high vacancy and soft rents; at the building level, lease term, occupancy and in-place rent decide where a property lands.
Market pressure · CoStar, Inland Empire Industrial Market Report, Q3 2026
- Vacancy 8.7%, uncharacteristically trending above the national average, though stabilizing; availability 12.5%, a 15-year high.
- Rents: 12-month asking rent growth -0.9%; one to several months of free rent is common on new, larger leases of five years or longer.
- Supply: 7.5 million SF delivered against 6.1 million SF of net absorption over 12 months; less than 10 million SF is forecast for completion in 2026 and 2027.
CoStar notes that availability often runs ahead of vacancy because it includes all sublease space and under-construction supply, so read 12.5% and 8.7% as two different gauges.
Lease term and occupancy. In CoStar’s example, a fully leased 526,000-SF San Bernardino logistics building on 56 acres, about 30 of them excess land, sold in December 2025 for $123 million ($234/SF) at a reported year-one pro forma cap rate in the high 5% range, with about 4.5 years left on its lease. Longer term, stronger credit or below-market rent can pull a building toward the low end; a short term pushes it up.
Owner-users can shape that lease in a sale-leaseback.
Common questionsInland Empire Industrial Cap Rates: Frequently Asked Questions
What is the average cap rate for industrial property in the Inland Empire?
CoStar’s Q3 2026 report puts the 12-month average at 5.9% on closed Inland Empire industrial sales, with a median of 5.8% and a range of 3.8% to 12.0%. Its modeled market cap rate for all properties is 4.9%.
What is a good cap rate for industrial property in 2026?
There is no single good number. Benchmark against CoStar’s Q3 2026 Inland Empire figures (4.9% market, 5.9% average on closed sales) and its mid-5% to 6% range for logistics sales over $10 million. Lease term, occupancy, tenant and location decide where a building fits.
Are Inland Empire industrial cap rates going up or down?
They rose after 2022: CoStar’s market cap rate went from 4.1% in 2022 to 4.9% so far in 2026, and closed deals averaged 6.2% this year through September. CoStar forecasts 4.9% for 2026 and 4.8% for 2027, expecting cap rates to hold stable or lower slightly.
What are industrial cap rates in Riverside County?
CoStar publishes no county-level figure. Its Q3 2026 submarket market cap rates on the Riverside County side include 4.9% in Riverside, 4.8% in Moreno Valley/Perris, 5.2% in Corona/Eastvale and 5.7% in South Riverside.
Why are flex cap rates higher than warehouse cap rates?
CoStar prices Inland Empire flex at a 6.2% market cap rate versus 4.8% for logistics (2026 year to date), but it does not state a reason.
What is the difference between a market cap rate and a transaction cap rate?
A transaction cap rate averages the deals that closed, so it moves with the mix of what sold. A market cap rate is CoStar’s estimate for all properties, informed by those trades. Hence 4.9% market and 5.9% transaction for the same period.
How do I calculate the cap rate on a warehouse?
Divide annual net operating income by purchase price and multiply by 100. Hypothetically, $650,000 of NOI on an $11.0 million price is about a 5.9% cap rate.
Pricing an Inland Empire industrial building?
Bring us the rent roll and leases. Robert Mendieta Jr., CCIM, with more than 20 years of commercial real estate experience, will show where your building sits against these benchmarks.
Call Robert: (951) 977-3251Or start with a free property valuation or use the form below.
Sources
- CoStar · Inland Empire Industrial Capital Markets Report · Q3 2026 (dated September 30, 2026).
- CoStar · Inland Empire Industrial Market Report · Q3 2026 (dated September 30, 2026).
- CoStar · Inland Empire Retail Capital Markets Report · Q3 2026 (dated September 30, 2026).
- CoStar · Industrial Bulk Distribution National Report · United States (dated September 18, 2026).
- Apex Real Estate Services · Commercial Real Estate Glossary (“Cap Rate”) · September 23, 2026.
CoStar reports are licensed research with no public link. Nothing here is investment, legal or tax advice or an offer.
Robert Mendieta Jr., CCIM · Associate Broker · Commercial Division · DRE #01422904 · Apex Real Estate Services · 3750 E. Florida Ave Suite A, Hemet, CA 92544 · (951) 977-3251 · robert@apex-res.com · Last updated: October 3, 2026.