Los Angeles Industrial Market Report

Upward vacancy movement may have plateaued. Industrial vacancy in Los Angeles County has eclipsed 7 percent, marking its highest level since at least 2000. Historically elevated conditions are widespread across property types as the local warehouse, distribution center, and manufacturing sectors each ended June with at least 13-year-high vacancy. Still, supply and demand appear to be aligning. Net absorption outpaced deliveries in two of the last three quarters after demand exceeded completions only once over the prior 14 quarters. With second-half supply additions slated to increase inventory by just 0.2 percent, and half of this space already accounted for, limited vacancy movement is expected over the near term.