Los Angeles industrial shifts back to negative absorption

In Q2 2025, the Los Angeles industrial market reverted to negative absorption, totaling -1.5 million square feet (msf). Nearly all submarkets experienced declining occupier activity, with the exceptions of Ventura County and Commerce/Vernon. Most of this decline stemmed from the South Bay and Mid-Counties submarkets, driven by uncertainty surrounding tariff changes and a recent drop in cargo volume. Notable occupier move-outs included Starship Logistics vacating 261,500 square feet (sf) in Long Beach, USPS vacating 231,000 sf in Carson and Oldcastle infrastructure vacating 204,000 sf in Commerce. As a result, vacancy rose by 50 basis points (bps) from the previous quarter to a historic high of 7.0%. This represents an increase of 130 bps compared to the 5.7% vacancy rate recorded one year earlier, largely due to a growing inventory of available spaces under 200,000 sf.

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