Randy Brown, Sun Life's chief investment officer, mentioned the drop in achievable rents in the Inland Empire due to oversupply bubble created by strong development completions and growth during the pandemic.
Despite fully occupied properties with strong tenants and extended leases in the Inland Empire, the valuation slump persists for Sun Life Financial and other investors.
Prologis, a major U.S. warehouse owner, faced lower earnings guidance due to reduced occupancies, particularly in the Inland Empire and Southern California.
The Inland Empire had around 4,000 warehouses occupying 1 billion square feet with another 170 million square feet in the pipeline as of January last year, leading to a rise in industrial vacancy to 6.1%.
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