Los Angeles Industrial Market Report

Port volumes poised to improve, following volatile period. Los Angeles’ industrial sector entered 2024 in a more favorable position than last year, when contract negotiations between dockworkers, terminal operators and shipping companies shifted the movement of some goods to Gulf and East Coast ports. With a six-year labor agreement now in place, a rebound in cargo volumes is likely, especially if an East Coast labor strike occurs. If this dynamic materializes, demand for warehouse and distribution space near inland intermodal terminals and local industrial hubs would be fortified, a boon for speculative projects in the San Gabriel Valley and South Bay. Both areas collectively account for three-fourths of the 5.4 million square feet slated for delivery countywide this year. Apart from these industrial-heavy zones, no other submarket is expected to receive more than 900,000 square feet of new space, limiting local supply-side pressure. A moderate increase in overall vacancy is anticipated as a result, with the metro’s year-end rate ranking below average for a market that houses a major port.