Los Angeles Industrial Market Report

4th Quarter 2021

Posted In — Market Research | Market Report


DIRECT NET absorption reported positive gains for the 4th consecutive quarter with 1,983,798 SF absorbed, further compressing direct vacancies to a record low 1.1% in 4Q 2021.

COMPETITION for industrial space has never been higher. Lack of available options, rapid growth of ecommerce, and tenants needing to expand their industrial footprint to fulfill their just-in-case approach have caused competition for available space to spike. Rental rates concluded the year at a new all-time high of $1.30/SF on a triple net basis, a 15% increase YOY.

CAPITALIZING ON DEMAND, it has become normal for landlords to offer little to no concessions and annual increases between 4%-5%.

OVER 2M SF WAS DELIVERED in 2021 with 3.6M SF currently under construction. Due to the lack of developmental land, developers have remained aggressive for renovation and repositioning projects which have pushed land values over $120/SF.


THE LOS ANGELES COUNTY unemployment rate decreased 70 BPS from the month prior to 7.1% in November 2021. Job gains between October and November reported an increase of 42,500 jobs.

THE PORT OF LOS ANGELES 811,460 TEU’s in the month of November and is set to break a new record with an expected volume of 10.7M TEU’s by year end, 13% more than the previous record set in 2018.


span class=”bold-intro”> AS MORE OCCUPIERS switch from just-in-time to a just-in-case model to store enough inventory for any future supply issues, demand for industrial space will remain extremely competitive. Tenants will need to act quickly as availabilities dwindle across the LA Basin, further propelling rental rates past unprecedented numbers with rent growth forecasted to be between 10%-15% in 2022. With limited options across the metro and space commonly leased a year in advance, we can expect the volume of renewals to increase in the following quarters.

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