Los Angeles Industrial Market Report

Improving demand trends could be hampered by looming tariffs. Los Angeles recorded positive net absorption during the first quarter of 2025, ending a three-year stretch where quarterly relinquishments surpassed move-ins and renewals. Demand improvement was most apparent in Antelope Valley, where the completion of a 1 million-square-foot Trader Joe’s distribution center underscores the submarket’s growing strategic appeal. Westside and Central Los Angeles also posted year-over-year declines in vacancy in the first quarter, supported by increased leasing activity near Los Angeles International Airport. South Bay showed similar demand strength, though more than half of the space delivered since 2023 is still vacant. Home to the Port of Los Angeles — where roughly half of all cargo volume is tied to China — South Bay is particularly exposed to trade policy uncertainty, though the effects could extend across the broader metro. As such, metrowide net absorption will remain negative in 2025, with vacancy expected to reach its highest level in at least 30 years.