Los Angeles Industrial & Warehouse Market Report | Q1 2026
Key Takeaways
- Los Angeles industrial warehouse rents have corrected nearly 50% from their 2023 peak — declining from $1.97/SF/mo to approximately $1.21–1.39/SF/mo NNN — but the rate of decline is decelerating, signaling emerging price stability.
- LA County vacancy reached 5.4–5.9% in Q1 2026, up roughly 100 bps year-over-year. Despite the headline softening, this remains well below the 7.5% national average and reflects one of the tightest major metro markets in the US.
- Net absorption in LA County turned positive at roughly 1 million SF in Q1, led by advanced manufacturing, defense, and aerospace users. Logistics demand is slower but stabilizing.
- Construction sits near cycle lows with minimal new deliveries — the development pipeline has essentially evaporated. Combined with positive absorption, this sets up vacancy compression in the back half of 2026. Browse LA warehouse listings on WareCRE.
5.4%
Direct Vacancy (CBRE)
$1.32
Avg. Rent (NNN/SF/Mo)
-49%
Rent Correction from Peak
+1.1M
SF Absorbed (LA County)
Los Angeles is going through the most significant industrial repricing in a generation — and for businesses looking for warehouse space, that’s actually good news. After years of eye-watering rents that priced out all but the most port-dependent operations, LA County industrial rents have corrected nearly 50% from their 2023 peak. The market that was once untouchable for small businesses is suddenly within reach for operators who need West Coast proximity.
But don’t mistake a correction for a collapse. Los Angeles remains the most expensive industrial market in the US, anchored by the busiest container port complex in North America. The correction is supply-driven — landlords are repricing to maintain leasing velocity — not demand-driven. Tenant engagement is improving, tour activity is rising, and the construction pipeline has essentially evaporated, setting up the conditions for the next tightening cycle. Here’s what you need to know.
Market Snapshot: Q1 2026
| Metric | Q1 2026 | Change |
|---|---|---|
| Direct vacancy (LA County) | 5.4–5.9% | +70–100 bps YoY |
| Availability rate | 8.1–9.5% | Elevated vs. historical |
| Avg. asking rent (NNN/mo) | $1.21–$1.39/SF | -5 to -9% YoY |
| Rent decline from 2023 peak | ~49% | Decelerating |
| Q1 net absorption (LA County) | +934K to +1.1M SF | Positive |
| Leasing volume | 5.9M SF | -38% YoY |
| Under construction | Near cycle lows | Pipeline evaporated |
| Investment sales (Q1) | $899M / 66 deals | Healthy velocity |
The data ranges reflect different brokerage methodologies — CBRE reports a tighter 5.4% direct vacancy while Savills reports 7.3% including broader geographic scope. Regardless of source, the story is the same: LA County remains structurally tight compared to national averages, rents are correcting but stabilizing, and the supply pipeline is near zero.
Rent Trends: The Correction Is Decelerating
Los Angeles industrial rents have now declined for 11–12 consecutive quarters, depending on the data source. The average asking rate has fallen from a peak of approximately $1.97/SF/mo NNN in 2023 to $1.21–$1.39/SF/mo in Q1 2026 — a correction of roughly 30–49% depending on the source and submarket.
But the pace of decline is slowing. The year-over-year drop has decelerated to roughly 5–9%, compared to double-digit declines in 2024. Landlords are repricing aggressively to maintain leasing velocity — offering rental abatement, longer free-rent periods, and TI allowances that didn’t exist two years ago. For tenants, this is the most favorable negotiating environment since before the pandemic.
The bifurcation by building type and location matters:
South Bay and port-adjacent (Class A): Modern logistics space near the ports commands $1.40–1.75/SF NNN/mo, reflecting irreplaceable infrastructure access. Aerospace and defense users are paying premiums for specialized space in Torrance, El Segundo, and Hawthorne.
Mid-Counties and Central LA: $1.10–1.35/SF/mo for well-located multi-tenant product. The Mid-Counties vacancy dropped 62 bps YoY to 5.91%, one of the few submarkets tightening.
San Fernando and San Gabriel Valley: More moderate pricing with rents closer to $1.00–1.20/SF/mo, but absorption has been negative as these submarkets work through tenant departures.
For Tenants
This is a rare window in Los Angeles. Rents have corrected nearly 50% from peak, landlords are offering concessions, and the construction pipeline is empty. If you’ve been priced out of LA before, it’s worth looking again — the math has changed. But don’t wait indefinitely: when vacancy starts compressing (likely late 2026), concessions will disappear quickly in this supply-constrained market.
Construction Pipeline: Empty
This is the most important data point in the LA market right now. The construction pipeline has effectively evaporated. New deliveries in Q1 2026 totaled just 1.0–1.6 million SF — a fraction of the pace seen during the 2022–2023 boom. New starts have slowed to a trickle as developers face a combination of scarce developable land (LA County is one of the most land-constrained industrial markets in the country), elevated construction costs, and tighter lending standards.
This matters because Los Angeles doesn’t have the land release valve that markets like Atlanta, Dallas, or Phoenix have. When LA runs out of spec supply, there’s no greenfield corridor to absorb overflow demand. The market tightens — and it tightens fast. The 2020–2022 cycle proved this: vacancy went from 4% to under 2% in 18 months when supply couldn’t keep up with port-driven demand.
For Operators
The rent correction has been painful, but the supply picture is now working in your favor. With virtually no new competitive supply in the pipeline and absorption turning positive, the conditions for rent stabilization and eventual recovery are in place. Hold rate on quality infill product — the repricing cycle is nearing its bottom.
Submarket Breakdown
South Bay / Port Corridor (Carson, Compton, Torrance, Long Beach)
The epicenter of LA’s logistics economy and increasingly a hub for advanced manufacturing. The Ports of Los Angeles and Long Beach together form the busiest container port complex in North America — the Port of Long Beach alone processed a record 9.9 million TEUs in 2025. Rents for modern space run $1.40–1.75/SF NNN/mo, with older facilities at $1.10–1.35. Aerospace and defense users are actively expanding across Torrance, El Segundo, and Hawthorne, including Varda Space Industries’ 200K SF lease at the former Mattel Design Center and multiple defense contractor expansions. Amazon leased 500K SF in Long Beach, and Apex Logistics consolidated into 440K SF in Torrance.
Mid-Counties (Industry, City of Commerce, La Mirada)
One of the few LA submarkets that’s actually tightening. Vacancy dropped 62 basis points YoY to 5.91% in Q1, with positive absorption in two consecutive quarters. Rents average $1.30/SF/mo NNN. The central location serves both the LA and Orange County markets, making it a natural fit for regional distribution. The development pipeline is near zero, reducing risk of additional supply pressure.
San Fernando Valley
LA’s workhorse for small and mid-bay industrial. Rates are more moderate at $1.00–1.25/SF/mo NNN, and the Valley offers a unique combination of entertainment industry demand (studio warehousing, set storage, production facilities) alongside traditional light manufacturing and distribution. Q1 absorption was negative, driven by a few large tenant departures, but small-bay demand remains steady.
Central LA (Vernon, Commerce, Downtown Adjacent)
The traditional industrial heart of LA. Vernon and Commerce offer the rare combination of port proximity, highway access (I-5, I-710, I-10), and an established industrial workforce. Rates range from $1.15–1.45/SF/mo NNN. Food production, cold storage, and light manufacturing dominate the tenant base. Older building stock means lower clear heights and loading limitations, but location premiums persist.
San Gabriel Valley
Negative absorption in Q1 driven by notable move-outs, including Leopard Transnational vacating 363K SF in El Monte. Rents are in the $1.00–1.20/SF/mo range. The submarket serves a mix of import-related distribution (proximity to rail and the 60 freeway) and local service businesses. Landlords are competing more aggressively on terms here than in the tighter South Bay and Mid-Counties.
| Submarket | Vacancy | Rent (NNN/SF/Mo) | Q1 2026 Profile |
|---|---|---|---|
| South Bay / Port | Low | $1.40–$1.75 | Port logistics + aerospace demand |
| Mid-Counties | 5.9% | ~$1.30 | Tightening, positive absorption |
| San Fernando Valley | Moderate | $1.00–$1.25 | Entertainment + light industrial |
| Central LA | Low–moderate | $1.15–$1.45 | Food production, cold storage |
| San Gabriel Valley | Elevated | $1.00–$1.20 | Negative absorption, tenant leverage |
Co-Warehousing & Flexible Warehouse Space in Los Angeles
LA’s co-warehousing and flexible warehouse market is uniquely well-positioned. The combination of high barriers to entry (expensive traditional leases, long-term commitments, complex permitting) and a massive population of small businesses creates strong demand for flexible, smaller-format warehouse space.
Co-warehousing operators in the LA metro offer units from a few hundred square feet to several thousand, typically with month-to-month or short-term lease options. Properties are concentrated in areas like the Mid-Counties, Central LA, and the San Fernando Valley, where building stock and zoning support multi-tenant configurations.
Who’s leasing: E-commerce operators needing West Coast fulfillment space, entertainment and production companies requiring staging and storage, food and beverage businesses serving LA’s massive hospitality market, and import distributors who need port-proximate space without committing to a 50,000 SF lease.
The rent correction has actually been a tailwind for co-warehousing operators — as traditional rents fall, the gap between a full-commitment lease and flexible space narrows, making the convenience and flexibility of co-warehousing even more compelling. Browse available listings on WareCRE’s LA marketplace.
Looking for warehouse space in Los Angeles?
Key Trends to Watch
1. Aerospace and Defense Reshaping Demand
Advanced manufacturing, defense, and aerospace users are emerging as a major demand driver alongside traditional logistics. Notable Q1 transactions include Neros leasing 265K SF of sublease space in Torrance and Varda Space Industries taking 200K SF at the former Mattel Design Center. These users are concentrated in the South Bay, and they’re paying premium rents for specialized space — a structural shift from the logistics-dominated demand of the past decade.
2. Tariff Uncertainty Cutting Both Ways
Geopolitical volatility and tariff uncertainty are creating cross-currents. Some importers are front-loading inventory through the ports, creating near-term absorption. Others are pausing expansion decisions, contributing to the 38% decline in leasing volume. Higher fuel and transportation costs are also impacting tenant decision-making. For a deeper analysis, see How Tariffs Are Reshaping Warehouse Demand in 2026.
3. Empty Pipeline Sets Up Next Tightening Cycle
The construction pipeline in LA County is near cycle lows. Combined with positive absorption and a land-constrained market, the conditions mirror the pre-2021 setup that led to the most aggressive rent growth in the market’s history. The tightening won’t be as extreme this time — sublease availability provides a buffer — but the direction is clear. Read more: Small-Bay vs. Big-Box: What the Vacancy Gap Means.
4. Inland Empire Context
LA County and the Inland Empire function as a single logistics mega-region, but their market dynamics have diverged. The IE is working through significant oversupply with average asking rents at $0.95/SF/mo (–7.7% YoY) and negative absorption. LA County is tighter and more expensive but stabilizing. For businesses evaluating SoCal options, the IE offers lower costs but longer lease-up timelines and more competition for tenants. The ports connect the two markets — cargo lands at LA/Long Beach and distributes through the IE.
Outlook: What to Watch in Q2–Q3 2026
Los Angeles is at an inflection point. The most significant rent correction in the market’s modern history is decelerating, absorption has turned positive in LA County, and the construction pipeline is empty. The structural advantages that make LA irreplaceable — the busiest port complex in North America, access to 40 million California consumers, an aerospace and defense ecosystem, and severe land constraints — haven’t changed.
Expect rents to stabilize in the back half of 2026. The 12-quarter decline is running out of momentum as landlords reach price levels that attract tenant activity. Concessions will remain available through mid-2026 but will compress as vacancy tightens.
Vacancy should begin compressing later this year as positive absorption continues and virtually no new supply enters the market. The sublease overhang (8.9M SF per Avison Young) provides a buffer, but direct space is already tightening in key submarkets like the Mid-Counties and South Bay.
The tenant window is real but finite. LA doesn’t stay soft for long. The last time the market corrected meaningfully (2009–2010), the recovery was swift and rents doubled within five years. Businesses that have been priced out of LA should evaluate now while concessions exist and negotiate long-term locks on favorable rates.
The biggest risk is a sustained decline in trans-Pacific trade volumes due to tariff escalation. LA’s industrial market is disproportionately tied to port throughput — any prolonged disruption to the Asia-to-US supply chain would hit absorption here harder than in domestic distribution markets.
Find warehouse space in Los Angeles
Browse co-warehousing, small-bay, and flex listings across the LA metro.
Data sources: CBRE Los Angeles Industrial Figures Q1 2026, Kidder Mathews Los Angeles Industrial Market Report Q1 2026, Colliers Greater Los Angeles Industrial Research Q1 2026, Savills Los Angeles Q1 2026 Industrial Report, Avison Young Los Angeles Industrial Market Report, Voit Real Estate Services Q1 2026, Cushman & Wakefield Greater Los Angeles MarketBeat, WareCRE marketplace data (May 2026).
Related Resources
Frequently Asked Questions
How much does warehouse space cost in Los Angeles?
Average asking rents in LA County are approximately $1.21–$1.39/SF NNN per month as of Q1 2026 ($14.52–$16.68/SF annually). Rents have corrected nearly 50% from their 2023 peak. South Bay port-adjacent space commands $1.40–$1.75/SF/mo, while the San Fernando and San Gabriel Valleys offer more moderate pricing at $1.00–$1.25/SF/mo.
What is the current industrial vacancy rate in Los Angeles?
LA County direct vacancy is 5.4–5.9% as of Q1 2026, up roughly 100 basis points year-over-year but still well below the 7.5% national average. Availability (including sublease space) ranges from 8.1–9.5%. The Mid-Counties submarket is actually tightening with vacancy dropping to 5.91%.
Is Los Angeles warehouse rent going down?
Yes, but the decline is decelerating. Rents have fallen for 11–12 consecutive quarters from the 2023 peak, but the annual rate of decline has slowed to 5–9% compared to double-digit drops in 2024. With the construction pipeline near zero and absorption turning positive, most analysts expect rents to stabilize in the back half of 2026.
Should I lease warehouse space in LA or the Inland Empire?
It depends on your operation. LA County is essential for port-adjacent logistics, last-mile delivery to LA’s 10+ million residents, and aerospace/manufacturing operations. The Inland Empire offers lower rents ($0.95/SF/mo vs. $1.32/SF in LA) and larger footprints, but is working through significant oversupply. If you need proximity to the ports or LA consumers, the rent correction has made LA County more accessible than any time since 2020.
