Western

— By Cray Carlson of CBRE — The Inland Empire multifamily market remains one of the premier markets to invest in across Southern California, benefiting from ample land availability and less restrictive regulations than many neighboring markets. Still, like many markets, there was a disconnect between buyers and sellers in 2024 and 2025 due to interest rates. It remains psychologically difficult for investors to sell a property with an existing 3.5 percent interest rate and complete a 1031 exchange into an asset carrying a 6 percent rate. That spread creates a meaningful mental hurdle, and has prevented many owners from disposing of their properties. That hesitation, however, has not erased opportunity. There are still great opportunities in the market, even with a 6 percent interest rate. The economic fundamentals remain strong, and cap rates have increased even amid higher interest rates. Cap rates have climbed since last year, and there are still great returns to be had. While many investors continue to struggle with the reality of higher borrowing costs, escalated interest rates are not going anywhere in the near term. In 2024, the Inland Empire recorded 74 multifamily transactions of eight units or more. As of the beginning of …