LA Industrial Market Posts Record Vacancy
Los Angeles' industrial market has softened again. In the first quarter, it posted 632,511 square feet of negative absorption as elevated vacancy continued to pressure fundamentals, according to a new Savills market report.
Vacancy reached a record 7.3%, pushing asking rents down to $1.29 per square foot, the 12th straight quarterly decline and down 2.3% quarter-over-quarter and 6.9% year-over-year—though still nearly 39% above levels five years ago.
On a positive note, stabilization is expected as speculative construction remains limited, while logistics users continue to lease space amid shifting tariff dynamics. New constraints from California AB 98, which restricts large-scale warehouse development beginning in 2026, will further curb future supply in infill submarkets.
"Despite negative occupier movement in the Los Angeles industrial market during Q1, leasing momentum is expected to rebound," Caitlin Barrozo, research manager at Savills, told GlobeSt.com.
"Recent top lease transactions have been driven by aerospace and defense firms, along with leading logistics companies."
Source: GlobeSt/ALM