Los Angeles Industrial Market Report

Development limitations cap users’ options. Four of Los Angeles’ five largest submarkets started this year with sub-2 percent vacancy, highlighting the strength of the industrial sector as new challenges hit one of the metro’s foundational demand drivers. The ports of Long Beach and Los Angeles are expected to record softer container volumes through at least the first half of this year. Ongoing uncertainty surrounding labor negotiations with West Coast dockworkers, who have been operating without a contract since last summer, is prompting more shippers to shift cargo to East and Gulf Coast ports to avoid disruptions. This dynamic likely alters local demand for storage space used to house imports. Still, the metro ranks among the nation’s tightest markets this year, as Los Angeles registers minimal supply-side pressure that should steer users to existing spaces. Of the projects slated for delivery, most are in the South Bay and San Gabriel Valley. Outside of these areas, less than 1 million square feet is completed county-wide during 2023.