Los Angeles Industrial Market Report

Record vacancy tests West Coast’s largest market. A foundational generator of local industrial demand, container activity at the ports of Los Angeles and Long Beach was noteworthy last year, despite the impact of newly enacted tariffs on global trade. Each port also logged encouraging volumes in January and February, with the two facilities projected to handle more than 20 million TEUs again this year. However, the Iran conflict could impact volume. A steady flow of goods through both ports will help to stabilize local fundamentals in the county’s industrial hubs — South Bay, Commerce-Vernon, Lower San Gabriel Valley, Mid-Cities, and San Fernando Valley — at a time when overall vacancy is in the low-7 percent band for the first time since at least 2000. Mirroring many major markets, vacancy is most pronounced across 2020s-built properties, at nearly 25 percent as of this March. Fortunately, speculative deliveries will be minimal for the foreseeable future. This dynamic should allow some of these spaces to secure tenants amid a broader movement among users to modern facilities.