As we wrap up 2025 and look ahead to 2026, the Southern California industrial market continues to demonstrate resilience amid evolving economic conditions. At Lee & Associates, we're excited to share our latest quarterly report, which dives deep into macroeconomic drivers, port activity, and submarket fundamentals across South Bay, Midcounties, Central LA, and the Inland Empire. This blog post provides a high-level summary of the key findings—think of it as your quick guide to the trends shaping industrial real estate in SoCal. For the full details, including charts, data tables, and in-depth analysis, reach out to me directly. I'd be happy to send you the complete PDF report.
The U.S. economy showed strength in 2025, with real GDP accelerating to a 4.3% annual rate in Q3—the fastest in two years—driven by consumer spending, exports, and government outlays. Employment growth slowed, adding just 50,000 jobs in December, keeping the unemployment rate steady at 4.4%. Retail and e-commerce sales remained robust, with total retail up 3.3% year-over-year in November and e-commerce growing 5.1%, accounting for 16.4% of retail activity.Key warehouse occupiers in Q4 included:
Looking to 2026, GDP is projected to grow 2.7%, supported by fiscal stimulus and easing rates, though inflation lingers above 2% and trade policies remain uncertain.
SoCal ports handled elevated container volumes in 2025, with LA and Long Beach leading despite year-over-year declines in Q4. LA's total TEUs dropped 14.11% quarterly, while Long Beach saw an 8.82% dip. Inbound loads remained strong, but empties and exports contributed to the slowdown. West Coast gateways continue to anchor U.S. throughput, driving industrial demand in nearby submarkets.
Vacancy ticked up to 6.1% (from 6.0% in Q3), with positive net absorption of 90,662 SF offsetting 60,558 SF in deliveries. Under construction: 324,921 SF. Asking rents stabilized at $1.52 NNN, up quarterly but down annually. Sales volume surged to $370.5M, driven by institutional deals.
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Top Sales:
Trends: Availability rose to 6.1%, signaling a balanced market; investment focused on quality assets.
Vacancy rose to 6.8% (from 6.3%), with 191,874 SF net absorption and 493,874 SF delivered. Under construction: 28,320 SF. Rents held at $1.33 NNN, up quarterly but 11% below last year. Sales cooled to $81M across eight deals.
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Top Sales:
Trends: Direct space drove vacancy uptick; investors remain selective with cap rates at 4.7%.
Vacancy dipped to 5.6% (from 6.0%), thanks to strong 1,287,891 SF net absorption and no new deliveries. Under construction: 486,333 SF. Rents softened to $1.40 NNN, flat year-over-year. Sales volume rose on larger deals, with cap rates compressing to 5.4%.
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Top Sales:
Trends: Absorption stabilized vacancy; market bifurcated toward infill quality.
Vacancy climbed to 8.1% (from 7.6%), but net absorption rebounded to 2,186,058 SF amid 1,065,546 SF deliveries. Under construction: 6,791,711 SF—the highest pipeline. Rents stabilized at $0.99 NNN, down annually. Sales moderated to lower volumes and $208/SF pricing.
Top Leases:
Top Sales:
Trends: Supply growth outpaced demand, but positive absorption signals steady logistics interest.
Overall, the SoCal industrial market in Q4 2025 reflected a transition toward balance: softening rents, rising vacancies in some areas, but resilient demand from logistics, e-commerce, and manufacturing. Ports remain a key driver, and with 2026's projected growth, opportunities abound for savvy investors and occupiers.This is just a teaser— the full report includes detailed charts on rent trends, port volumes, and more. If you'd like the complete PDF or have questions about how these insights apply to your industrial needs in Long Beach or beyond, don't hesitate to reach out. Contact me, Ron Mgrublian, at Lee & Associates: rmgrublian@lee-associates.com. Let's connect and discuss your next move!
