The industrial market in Los Angeles is showing signs of recovery after a challenging period. In 2023-2024, vacancies surged, with L.A. facing occupancy losses more significant than any other U.S. market. However, demand for industrial space is picking up as 2025 begins. Leasing activity is on the rise, with more than 4 million square feet leased in January 2025 and over 3 million square feet leased in February. If this pace continues, the first quarter of 2025 could see the highest leasing volume in nearly four years, potentially reaching 12 million square feet.
In addition to the increased leasing volume, deal flow has also surged. Over 700 new industrial leases have been signed in L.A. County, and with a few weeks left in the first quarter, the total is expected to surpass 800 leases— the highest in a single quarter since early 2021. Notably, 14 new leases, including two sublet deals, have exceeded 100,000 square feet, surpassing the first-quarter total of 2024.
New buildings, especially in the San Gabriel Valley, are becoming more attractive to tenants. For example, Pleaser USA leased a nearly 270,000-square-foot facility in Walnut, California, for almost $100 million. As space availability hits a 10-year high of 78 million square feet (8% of inventory), tenants now have more options, and the L.A. industrial market is poised for a strong recovery in 2025.
Source: Costar
