Los Angeles Industrial Market Report

The following reflects Los Angeles industrial market conditions as of Q3 2026.

MARKET DRIVERS

South Bay continued to post solid demand for Class A industrial space in the third quarter, building on strong second-quarter performance, with defense technology, advanced manufacturing, space/satellite, and — to a lesser extent — logistics users driving activity. Limited availability of planned and under-construction product is intensifying competition for space. Among the quarter’s notable deals, missile manufacturer Castelion signed a lease for an existing Class A building in North Torrance at more than $3.00 PSF NNN.

LEASING DEMAND

Class A rents are now routinely landing in the $2.40 to $2.75 PSF NNN range, with many leases requiring enhanced security — typically a letter of credit equal to 9 to 12 months of gross rent. Rexford completed leases on two 30,000-square-foot buildings on Voyager in Torrance as construction wrapped up, while Sares Regis continued to see activity at Phase III of the former Toyota campus. Higher-quality Class B buildings — those with at least 24-foot clear heights and dock-high loading for every 5,000 SF of warehouse space — are also attracting increased interest, though average Class B product continues to see uneven demand, with some buildings sitting vacant for extended periods.

SALE MARKET

A notable pending transaction is 18500 Crenshaw Blvd in Torrance, a 180,269 SF concrete tilt-up building built in 1999 and listed by Lift Partners for $425 PSF. The fully leased property includes nearly 50,000 SF of office space, a 30-foot clear height, and limited truck loading, and is occupied by a recently established space and satellite tenant; Hines is reportedly under contract to acquire the asset at approximately a 6% cap rate. Overall sale activity picked up during the quarter, though financing conditions continue to weigh on buyer underwriting and deal timing.

NEAR-TERM OUTLOOK

With newly built Class A supply being absorbed quickly, rents for high-quality Class B buildings are expected to climb in the coming quarters. Sale activity is likely to stay measured as buyers weigh short- and long-term debt options against underwriting and exit cap rate assumptions. Leasing activity should continue to improve, supported by ongoing demand from advanced manufacturing, defense technology, space/satellite, and other industrial users targeting high-quality, well-located space.

Frequently Asked Questions

What is the industrial vacancy rate in Los Angeles in Q3 2026?

The direct industrial vacancy rate in Los Angeles reached 6.0% in the third quarter of 2026, up 30 basis points from 5.7% a year earlier, according to Kidder Mathews research. Total vacancy, which includes sublease space, stood at 6.7%, while total availability — space being marketed for future occupancy — was 8.4%. (Data source: CoStar)

What is the average industrial asking rent in Los Angeles?

The average direct asking lease rate for Los Angeles industrial space was $1.36 per square foot per month on a triple net (NNN) basis in the third quarter of 2026, down 3.55% from $1.41 a year earlier. Submarket rents ranged widely, from roughly $0.90 PSF/mo in South Gate to $3.00 PSF/mo in Arcadia/Temple City. Class A buildings are leasing in the $2.40 to $2.75 PSF NNN range. (Data source: CoStar)

How much industrial leasing activity took place in Los Angeles in Q3 2026?

Total industrial lease transactions in Los Angeles reached 5,872,077 square feet in the third quarter of 2026, according to Kidder Mathews research. That brought year-to-date leasing activity to 29,427,535 square feet, down 24.39% from 38,921,167 square feet over the same period in 2025. South Bay and San Gabriel Valley were among the most active submarkets for leasing this quarter.

What was net absorption for Los Angeles industrial space in Q3 2026?

Los Angeles industrial direct net absorption was negative 686,385 square feet in the third quarter of 2026, meaning more space was vacated than leased during the period. Year-to-date net absorption was negative 1,660,799 square feet, compared with positive 1,873,860 square feet over the same period in 2025. Mid-Cities and San Gabriel Valley posted the largest negative absorption for the quarter. (Data source: CoStar)

What is the construction pipeline for industrial space in Los Angeles?

Los Angeles industrial deliveries totaled approximately 674,000 square feet in the third quarter of 2026, a year-over-year decrease, according to Kidder Mathews research. Notable projects underway include Goodman Group’s 263,409 SF LAX01 Vernon building in Central Los Angeles, expected in December 2026, and Duke Realty’s 185,056 SF Mid Counties Distribution Center in Mid-Cities, slated for October 2026. Limited new Class A supply is contributing to increased competition for available space.

What was the largest industrial sale in Los Angeles in Q3 2026?

The largest industrial sale in Los Angeles in the third quarter of 2026 was the Marq Logistics Mid-Counties Distribution Center in Mid-Cities, a 150,548 SF building that sold for $51,250,000, or $340.42 per square foot, with Travelers Club Luggage acquiring the property from Ares Management Corp. Overall average industrial sale prices were $283.59 per square foot with an average cap rate of 5.7% for the quarter. (Data source: CoStar)

What was the largest industrial lease signed in Los Angeles in Q3 2026?

The largest industrial lease signed in Los Angeles in the third quarter of 2026 was at Port LA Distribution Center in South Bay, where an undisclosed tenant leased 338,899 square feet from BlackRock, Inc. in July 2026, according to Kidder Mathews research. Other large leases included a 220,000 SF deal at 19465-19485 E Walnut Dr in San Gabriel Valley and a 220,000 SF lease at Mid Counties Industrial Center in Mid-Cities.

Which Los Angeles industrial submarkets have the highest and lowest vacancy rates?

La Mirada in Mid-Cities had the highest direct industrial vacancy rate in Los Angeles at 15.0% in the third quarter of 2026, followed by Whittier at 14.4%, according to Kidder Mathews research. La Puente in San Gabriel Valley had the lowest direct vacancy rate at 0.6%. Central Los Angeles posted the lowest overall submarket group vacancy rate at 6.0%.

What is the outlook for the Los Angeles industrial market?

The Los Angeles industrial market is expected to see rising rents for high-quality Class B buildings as newly built Class A supply is absorbed, according to Kidder Mathews research. Sale activity will likely remain measured as buyers weigh financing conditions against underwriting and exit cap rate assumptions. Leasing activity is expected to continue improving, driven by demand from advanced manufacturing, defense technology, and space/satellite users seeking high-quality, well-located space.

How does the Los Angeles industrial vacancy rate compare to availability?

Los Angeles industrial total availability — which includes space being marketed ahead of becoming vacant — was 8.4% in the third quarter of 2026, compared to a direct vacancy rate of 6.0%, according to Kidder Mathews research. The gap between vacancy and availability suggests a meaningful amount of space is being pre-marketed. Total availability rose 10 basis points year-over-year.

Last updated: Q3 2026. Data source: EDD, CoStar. Compiled by the Kidder Mathews Research Group.

Q3 2026 Los Angeles Industrial Market: Key Data Points

Explore our full Los Angeles industrial market review for deeper insights into leasing trends, sale activity, and submarket performance.

Direct Vacancy Rate: Direct vacancy rose to 6.0% in Q3 2026, up 30 basis points year-over-year from 5.7%. Total vacancy stood at 6.7% and total availability at 8.4%.
Average Asking Rent: The direct asking lease rate averaged $1.36 PSF/mo NNN, down 3.55% from $1.41 a year earlier, with Class A product leasing between $2.40 and $2.75 PSF NNN.
Leasing Activity: Total lease transactions reached 5,872,077 SF in Q3 2026. Year-to-date leasing activity of 29,427,535 SF was down 24.39% compared to the same period in 2025.
Net Absorption: Direct net absorption was negative 686,385 SF for the quarter, bringing year-to-date net absorption to negative 1,660,799 SF, versus positive 1,873,860 SF through the same period in 2025.
Sale Activity: Sale transactions totaled 1,329,397 SF in Q3 2026 at an average price of $283.59 PSF and a 5.7% cap rate. The quarter’s largest sale was the Marq Logistics Mid-Counties Distribution Center for $51,250,000.
Construction Pipeline: New deliveries totaled approximately 674,000 SF in Q3 2026. Projects underway include the 263,409 SF LAX01 Vernon building (December 2026) and the 185,056 SF Mid Counties Distribution Center (October 2026).

Submarket Statistics

Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	3Q26 Direct Net Absorption (SF)	YTD Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	Average Direct Rental Rate (NNN)

Los Angeles Industrial Submarket Statistics 3Q 2026 — Central: includes Bell/Bell Gardens/Maywood, Commerce, Huntington Park/Cudahy, Los Angeles, Montebello/Monterey Park, Pico Rivera, South Gate, Vernon
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	3Q26 Direct Net Absorption (SF)	YTD Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	Average Direct Rental Rate (NNN)
Bell/Bell Gardens/Maywood	7,970,492	3.1%	3.1%	4.6%	-18,444	-74,721	76,849	$1.26
Commerce	45,137,319	6.3%	7.1%	7.4%	292,856	1,030,579	460,053	$1.27
Huntington Park/Cudahy	4,595,620	1.9%	2.2%	4.1%	130,118	200,353	83,421	$1.00
Los Angeles	125,066,422	7.0%	7.3%	8.7%	-597,516	-586,885	655,244	$1.54
Montebello/Monterey Park	11,886,884	5.1%	5.3%	5.4%	-63,249	6,435	24,806	$1.34
Pico Rivera	10,128,065	5.1%	5.1%	4.8%	138,434	75,478	72,752	$1.40
South Gate	9,982,039	2.6%	2.6%	4.5%	-102,981	-101,459	72,000	$0.90
Vernon	44,609,980	5.2%	6.0%	7.4%	309,662	143	260,547	$1.21
Central	259,376,821	6.0%	6.4%	7.6%	88,880	549,923	1,705,672	$1.33

Los Angeles Industrial Submarket Statistics 3Q 2026 — Mid-Cities: includes Artesia/Cerritos, Bellflower/Downey, Buena Park/La Palma, La Mirada, Norwalk, Paramount, Santa Fe Springs, Whittier
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	3Q26 Direct Net Absorption (SF)	YTD Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	Average Direct Rental Rate (NNN)
Artesia/Cerritos	13,105,294	6.4%	7.5%	15.2%	-131,135	-105,785	135,489	$1.03
Bellflower/Downey	5,519,451	1.1%	1.8%	2.8%	22,542	192,580	13,400	$1.34
Buena Park/La Palma	14,932,691	11.9%	11.9%	21.4%	-200,284	-262,225	73,731	$1.26
La Mirada	13,184,221	15.0%	16.8%	17.2%	-264,058	-1,006,774	247,003	$1.20
Norwalk	2,933,130	7.6%	7.6%	7.5%	-158,059	-199,962	2,900	—
Paramount	9,530,074	4.3%	4.3%	5.5%	22,798	-107,242	150,275	$1.08
Santa Fe Springs	54,517,192	4.4%	5.1%	7.2%	-207,526	263,122	526,492	$1.38
Whittier	4,035,885	14.4%	14.8%	14.7%	20,724	226,250	6,027	$1.19
Mid-Cities	117,757,938	7.0%	7.7%	10.9%	-894,998	-1,000,036	1,155,317	$1.27

Los Angeles Industrial Submarket Statistics 3Q 2026 — San Gabriel Valley: includes Alhambra, Arcadia/Temple City, Azusa, Baldwin Park, City of Industry/DB/HH/RH, Covina/West Covina, Duarte, El Monte, Irwindale, La Puente, Glendora/La Verne/San Dimas, Monrovia, Pomona/Claremont, Rosemead/San Gabriel, South El Monte, Walnut
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	3Q26 Direct Net Absorption (SF)	YTD Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	Average Direct Rental Rate (NNN)
Alhambra	2,285,125	2.4%	2.4%	2.3%	1,200	-33,340	12,937	$1.40
Arcadia/Temple City	3,145,553	5.6%	5.6%	6.3%	16,172	-102,707	3,612	$3.00
Azusa	6,856,577	6.9%	9.8%	12.6%	129,508	133,475	170,260	$1.11
Baldwin Park	5,277,648	2.8%	2.8%	3.1%	-66,053	-9,215	18,013	$1.37
City of Industry/DB/HH/RH	77,258,245	4.5%	5.9%	7.4%	-277,029	-204,891	566,925	$1.37
Covina/West Covina	3,554,889	7.9%	8.4%	16.3%	-120,245	-175,465	24,148	$1.89
Duarte	1,740,877	5.5%	5.8%	2.5%	60,027	897	15,400	$1.22
El Monte	8,876,738	5.9%	6.1%	9.1%	654	-209,193	65,640	$1.27
Irwindale	13,467,007	7.1%	7.2%	5.6%	117,197	-82,456	62,132	$1.17
La Puente	2,181,403	0.6%	0.6%	2.4%	146,616	198,129	26,600	—
Glendora/La Verne/San Dimas	6,372,866	9.4%	9.4%	9.7%	-60,455	-77,605	17,767	$1.45
Monrovia	3,291,229	4.2%	4.2%	6.1%	-14,318	-59,460	26,208	$1.75
Pomona/Claremont	20,085,139	3.6%	3.8%	4.2%	-81,961	-170,658	44,731	$1.22
Rosemead/San Gabriel	2,207,774	2.8%	2.8%	3.1%	-16,171	-7,185	18,421	—
South El Monte	11,453,062	4.8%	5.4%	6.5%	-104,723	-67,731	55,564	$1.48
Walnut	6,777,518	6.7%	8.7%	8.7%	-148,844	-199,442	32,609	$1.43
San Gabriel Valley	174,831,650	5.0%	5.9%	7.1%	-418,425	-1,066,847	1,160,967	$1.42

Los Angeles Industrial Submarket Statistics 3Q 2026 — South Bay: includes Carson, Compton, El Segundo, Gardena, Harbor City, Hawthorne, Inglewood, Lakewood/Hawaiian Gardens, Lawndale, Long Beach/Terminal Island, Lynwood, Rancho Dominguez/E Rancho Dominguez, Redondo/Hermosa Beach, San Pedro, Signal Hill, Torrance, Wilmington
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	3Q26 Direct Net Absorption (SF)	YTD Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	Average Direct Rental Rate (NNN)
Carson	36,021,344	6.0%	6.2%	10.4%	-72,498	-479,538	96,824	$1.37
Compton	25,202,001	10.5%	11.9%	13.4%	-387,397	-605,893	253,049	$1.25
El Segundo	8,073,424	4.8%	5.0%	5.7%	-4,055	-98,904	4,844	$2.21
Gardena	28,551,662	6.7%	7.0%	8.2%	37,660	-71,520	122,495	$1.36
Harbor City	1,821,683	4.7%	4.7%	4.7%	20,510	-58,455	3,000	—
Hawthorne	8,485,637	2.1%	3.2%	3.5%	-18,529	150,835	104,122	$1.74
Inglewood	4,780,527	2.0%	4.6%	5.1%	-5,271	-27,188	14,264	$1.83
Lakewood/Hawaiian Gardens	509,173	4.9%	4.9%	13.3%	-25,162	-19,963	0	$1.16
Lawndale	269,665	4.4%	4.4%	6.7%	950	-1,800	0	—
Long Beach/Terminal Island	24,750,703	6.7%	7.5%	9.6%	739,711	783,816	290,941	$1.61
Lynwood	4,106,283	1.9%	1.9%	3.7%	7,648	-25,880	0	$1.13
Rancho Dominguez/E Rancho Dominguez	13,746,890	6.2%	6.9%	9.4%	-40,277	380,698	284,244	$1.24
Redondo/Hermosa Beach	1,615,937	3.4%	3.4%	0.3%	-940	-55,369	0	—
San Pedro	2,782,567	1.2%	1.2%	1.9%	335,434	333,979	340,354	$1.97
Signal Hill	2,996,112	2.7%	2.7%	3.8%	22,302	11,793	9,799	$1.21
Torrance	29,824,795	6.8%	8.9%	9.7%	-79,880	-182,290	313,011	$1.64
Wilmington	4,079,855	5.7%	6.7%	7.7%	7,952	-178,160	13,174	$1.23
South Bay	197,618,258	6.3%	7.2%	9.0%	538,158	-143,839	1,850,121	$1.47

Los Angeles Industrial Market Total 3Q 2026 — combined totals for all submarkets
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Vacancy Rate	Total Availability Rate	3Q26 Direct Net Absorption (SF)	YTD Direct Net Absorption (SF)	3Q26 Total Leasing Activity (SF)	Average Direct Rental Rate (NNN)
Total	749,584,667	6.0%	6.7%	8.4%	-686,385	-1,660,799	5,872,077	$1.36

Data as of Q3 2026. Source: EDD, CoStar. Prepared by the Kidder Mathews Research Group.

Significant Sale Transactions 3Q 2026

Los Angeles Industrial Significant Sale Transactions 3Q 2026: property, submarket, SF, sale price, $/SF, buyer, seller
Property	Submarket	SF	Sale Price	$/SF	Buyer	Seller
Marq Logistics Mid-Counties Dist. Cntr.	Mid-Cities	150,548	$51,250,000	$340.42	Travelers Club Luggage	Ares Management Corp.
8685 Bowers Ave	Central Los Angeles	203,336	$35,774,500	$175.94	8685 Bowers Avenue, LLC	Hines
Smoky Hollow Industrial/Flex Campus	South Bay	79,381	$34,300,000	$432.09	Smoky Hollow Industries	Satco, Inc.
CommerceCentre@BuenaPark	North County	92,395	$28,100,000	$304.13	Undisclosed	Rexford Industrial Realty, Inc.
13100 Arctic Cir	Mid-Cities	120,357	$27,500,000	$228.49	Undisclosed	LBA Logistics
401 Coral Cir (Investment NNN)	South Bay	56,815	$27,250,000	$479.63	Majestic Asset Mgmt., Inc.	Hackman Capital Partners

Significant Lease Transactions 3Q 2026

Los Angeles Industrial Significant Lease Transactions 3Q 2026: property, submarket, SF, date, landlord, tenant
Property	Submarket	SF	Transaction Date	Landlord	Tenant
Port LA Distribution Center	South Bay	338,899	July 2026	BlackRock, Inc.	Undisclosed
19465-19485 E Walnut Dr	SGV	220,000	July 2026	Frank & Son Trucking	SLA Inc
Mid Counties Industrial Center	Mid-Cities	220,000	July 2026	Prologis, Inc.	Delivrae Inc
20974 S Santa Fe Ave	South Bay	211,446	August 2026	Michael Kaplan	Undisclosed
12300 Lakeland Rd	Mid-Cities	185,056	July 2026	Duke Realty Corporation	McMaster-Carr Supply Company
Torrance Industrial Exchange	South Bay	177,103	July 2026	Kearny Real Estate Partners	Undisclosed (Sublease)
415 S Motor Building	SGV	94,321	September 2026	Rexford Industrial Realty, Inc.	United Stores, Inc. (Expansion-Relocation)

Significant Under Construction

Los Angeles Industrial Significant Under Construction 3Q 2026
Property	Address	Submarket	SF	Owner	Delivery
LAX01 Vernon	3094 E Vernon Ave	Central Los Angeles	263,409	Goodman Group	December 2026
Mid Counties Distribution Center	12300 Lakeland Rd	Mid-Cities	185,056	Duke Realty Corporation	October 2026
1210 E 223rd St	1210 E 223rd St	South Bay	181,014	Overton Moore Properties	July 2027
LogistiCenter	18455 S Figueroa St	South Bay	180,705	Dermody	April 2027
Prologis Shoemaker Distribution Center	16323 Shoemaker Ave	Mid-Cities	160,837	Prologis, Inc.	November 2026
Rockland Business Park	2222 Rosemead Blvd	SGV	156,877	Waylee International, Inc.	July 2027