Los Angeles Industrial Market Poised to Rebound in 2025

Southern California’s industrial real estate market is showing signs of recovery in 2025, following a period of elevated vacancies and subdued leasing activity. This resurgence is driven by increased import volumes at local ports and legislative changes that may enhance the long-term value of industrial properties. 

According to Jeff Chiate, executive vice chair of industrial capital markets at Cushman & Wakefield, “Despite a continued slowdown in leasing early in 2025, we are seeing some improvement in activity in core industrial markets in Southern California, which shows stronger signs of stabilization overall.” 

While rental rates remain below historical peaks and vacancy rates have risen due to new constructions entering the market unleased, the uptick in activity suggests a positive shift in market fundamentals. New legislation set to take effect in 2026 is anticipated to further bolster the industrial sector’s long-term prospects. 

However, the potential impact of tariffs on goods from China and other nations introduces uncertainty. The full ramifications of these trade policies on the industrial real estate market remain to be seen. 

Overall, the Southern California industrial real estate market is poised for a rebound in 2025, buoyed by increased port activity and supportive legislative measures, despite facing challenges such as higher vacancy rates and trade policy uncertainties.