Data Courtesy of CoStarâ„¢
The Los Angeles industrial market is showing early signs of stability in 2026. Space availability appears to have peaked slightly above 8% after easing through the second half of 2025. Net absorption turned positive, reaching 2.5 million SF for the year, a strong rebound from the steep losses recorded in 2023 and 2024. Vacancy measures 6.5% as of 2026Q1.
Occupancy had fallen in recent years due to higher interest rates, local population loss, weaker home sales, and broad reductions among logistics users, retailers, and manufacturers. Some new projects also delivered space without tenants. Vacancies rose the most in portrelated submarkets such as Vernon, Commerce, and City
of Industry, where some logistics firms gave back older and less efficient properties. Volatile imports and the potential for weaker consumer spending remain risks that could delay recovery.
Despite these challenges, leasing activity continued to strengthen. Deals recorded before year-end totaled a record 42 million SF in 2025, with additional transactions likely to bring the total closer to 45 million SF. However, demand for new space is still limited. About 5 million square feet of the 16 million square feet completed since 2023 remains available, and most of the current construction pipeline is still uncommitted. The pipeline is modest, at roughly 2.6 million SF, and ongoing removal of outdated buildings will help limit the total supply. If U.S. retail spending performs as expected, vacancy rates should begin declining in late 2026.
12 Mo Deliveries in SF
12 Mo Net Absorption in SF
Vacancy Rate
12 Mo Rent Growth
12 Mo Sale Volume
Lease concessions are still common, with one to several months of free rent typically offered with larger leases. Rents are forecast to decline slightly further in 2026. Several risks to the forecast are apparent. Higher tariffs could limit the trade of imports and exports through the LA ports. Additional bankruptcies of brick-and-mortar retailers could also weigh negatively on the market and extend the downturn in rents.
However, it appears that rents may be in the process of bottoming out, with demand at least matching supply more recently. If vacancy makes a convincing move lower earlier than forecasted, in the first half of 2026, market rents could rise for the first time since 2023.
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