Ontario is the anchor of Southern California's industrial real estate market. Home to one of the West Coast's most active cargo airports, a Class A freeway network, and over 150 million square feet of industrial inventory, Ontario is where major logistics decisions get made. This report covers current market conditions through Q1 2026.
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Ontario's industrial market encompasses approximately 155 million square feet of inventory — the largest concentration of industrial space in the Inland Empire and one of the densest in the entire United States. The market stretches from the Milliken Corridor in the east to the Ontario Airport Business Center in the west, with major clusters along the 10, 15, and 60 Freeways.
The tenant profile skews large: over 60% of Ontario's industrial stock consists of buildings greater than 100,000 SF, and the city has attracted every major national 3PL operator, e-commerce fulfillment provider, and big-box retailer with a West Coast distribution strategy. Amazon, FedEx, UPS, XPO, and Prologis are among the most visible names on Ontario's industrial landscape.
Key Market Stats — Q1 2026
- Total inventory: ~155 million SF
- Vacancy rate: 6.2% (up from 3.8% in 2024)
- Net absorption: +820K SF (trailing 12 months)
- Average asking rent: $1.44/SF/month NNN (Class A)
- New deliveries 2025: 4.2M SF
The Ontario Airport Effect
Ontario International Airport (ONT) is arguably the single most important demand driver for the submarket's industrial real estate. With direct air cargo service to Asia, Mexico, and major domestic hubs, ONT has attracted a dense cluster of time-sensitive logistics operations that require proximity to the tarmac — from pharmaceutical distributors to automotive parts suppliers.
Properties within a 3-mile radius of ONT consistently command a 10–15% rent premium over comparable buildings further east. As the airport continues to expand cargo capacity (a $180M terminal upgrade was completed in 2025), demand for airport-adjacent industrial is expected to remain elevated.
Vacancy & Rents
Ontario's vacancy rate climbed to 6.2% in Q1 2026, up from a historically tight 3.8% just two years ago. The increase is driven primarily by a wave of speculative construction deliveries — approximately 8.5M SF came online between 2023 and 2025 — not by a collapse in tenant demand. Several large blocks (200,000–500,000 SF) remain vacant as tenants take longer to make location decisions in a market where they now have options.
Class A asking rents have settled at $1.44–$1.65/SF NNN for distribution space, down from peak rents of $1.85+/SF in 2023. The correction has been most pronounced for large-format single-tenant buildings, while multi-tenant and last-mile product under 50,000 SF has held firmer at $1.70–$2.00/SF NNN.
Demand Drivers
- Air cargo logistics: ONT's cargo throughput grew 9% in 2025, pulling in new occupiers needing bonded warehouse and freight-forwarding space near the field.
- E-commerce returns processing: Several national retailers have established Ontario as a returns hub, occupying 80,000–200,000 SF facilities configured for high-volume receiving and repackaging.
- Pharmaceutical distribution: Controlled-temperature drug distribution has emerged as a fast-growing segment, with three new pharmaceutical tenants signing leases in Ontario in H2 2025.
- Defense & aerospace: The concentration of defense contractors in the broader Inland Empire has created a steady pipeline of smaller (15,000–60,000 SF) industrial requirements in Ontario's west end.
Investment Outlook
Ontario remains one of the most liquid industrial investment markets in the country. Cap rates for stabilized Class A product have settled in the 4.75–5.50% range, with airport-adjacent assets commanding the low end of that spread. Value-add buyers have become more active as well-located 1990s and early 2000s buildings with near-term lease rollovers present mark-to-market opportunities.
Institutional capital from REITs (Prologis, EastGroup, Rexford) continues to anchor the buyer pool for large-format assets, while private buyers and family offices compete for multi-tenant product in the $5M–$25M range. Sale-leaseback activity picked up in Q1 2026 as owner-occupants took advantage of the higher price environment to monetize real estate and redeploy capital into their operating businesses.
Notable Ontario Transactions — Recent 12 Months
- 3800 Jurupa St — 425,000 SF logistics facility sold, $215/SF
- 2150 S. Milliken Ave — 95,000 SF leased to 3PL, $1.58/SF NNN, 7-yr term
- 1640 S. Bon View Ave — 210,000 SF sale-leaseback, 5.1% cap rate
2026 Forecast
Ontario's fundamentals remain sound despite the vacancy uptick. The speculative construction pipeline has slowed materially — only 1.8M SF is currently under construction, compared to the 4M+ SF annual pace of 2023–2024 — and demand from logistics and e-commerce occupiers remains active. We expect vacancy to peak near 6.5–7.0% in mid-2026 before trending back down as supply digestion progresses.
For landlords, proactive lease renewals with existing tenants are advisable in this environment; replacing a departing tenant in a 6% vacancy market takes longer than it did in 2022. For tenants, the current market offers the best negotiating leverage in four years — now is an ideal time to explore expansions, relocations, or early renewal negotiations.
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