Industrial Real Estate Insights

Orange County’s industrial market returned positive net absorption for the second straight quarter in Q1 2026, with vacancy at 6.30%, asking rents at $18.12 PSF, and rising sale prices signaling improving conditions for owners and occupiers.

A concise overview of the Q1 2026 Southern California industrial market, highlighting shifting logistics trends, softening rents, and emerging opportunities for tenants and investors.

A 24,000 SF Irwindale investment property at a 5.7% cap rate, with building, RV parking, and billboard income near the 605/210 interchange.

From Post-COVID Boom to Balanced Reality: 2025 Industrial Market Insights

The U.S. economy surged to a blistering 5.4% GDP growth in Q4 2025—its strongest quarter since 2018—fueled by robust consumer spending and a sharply narrowed trade deficit, even as immigration enforcement and looming tariffs reshape the labor market and future outlook.

The San Gabriel Valley industrial market recovered strongly in 2025, with Q4 vacancy falling to 5.2% (from 6.2% in 2024), over 2 million sq ft of positive net absorption for the year, 9.7 million sq ft leased across 638 deals, limited new construction (530k sq ft underway), and average triple-net asking rents moderating to $15.48 per sq ft.

Orange County's industrial market rebounded in Q4 2025 with positive net absorption of +316,406 SF — its first in nearly three years — officially ending a record 11-quarter contraction and signaling stabilization in one of the nation's most desirable logistics hubs thanks to strong port access and moderating rents.

SoCal Q4 2025 industrial market rebalancing: vacancies 5.6–8.1% across submarkets, rents softening/stabilizing, leasing moderated with rising supply, yet strong demand from 3PLs, e-commerce, manufacturing & AI/tech—plus solid macro growth & port activity—supports 2026 expansion.

In today’s industrial site selection landscape, incentives have become the decisive factor — with reliable power, skilled labor, and aggressive policy packages (fueled by the CHIPS Act, Inflation Reduction Act, and layered state programs) now outweighing traditional drivers like land cost and logistics, transforming “Power, People, and Policy” into the new make-or-break criteria for major manufacturing, data center, and reshoring projects across the U.S.

Q3 2025 U.S. economy shows a sharp disconnect: consumer-driven GDP is tracking a robust ~3.9%, while the labor market weakens rapidly with rising layoffs and slowing hiring, leaving the Fed cautious and commercial real estate markets facing heightened uncertainty until “something’s got to give.”

Ron Mgrublian - Lee & Associates successfully sold a ±38,833 SF industrial land parcel at 1491 E Mission Blvd in Pomona, CA, featuring a versatile owner-user property with yard, office/residence, and prime freeway access.

Small-bay industrial properties (2,000–10,000 sq ft) are outperforming large warehouses with 4.2% vacancy (vs. 7.4%), rents up over 40% since 2020, and 62% of Q2 2025 sales volume, driven by reshoring, last-mile logistics, 36M+ small businesses, and structural supply scarcity in hotspots like Lehigh Valley, I-4 Corridor, and Metro Vancouver.