Aerospace and defense demand is reshaping the Long Beach and Signal Hill industrial market. Here's where vacancy, rents, and sales activity stand heading into the second half of 2026.
Industrial occupancy in Long Beach and Signal Hill is beginning to recover after losses recorded between 2022 and 2024, driven by higher interest rates, inflation, and weaker import volumes at the nearby ports. Tenants across several industries — distributors, wholesalers, manufacturers, and online retailers — vacated space during that stretch. Aerospace users, particularly rocket manufacturers clustered in the "Space Beach" area, have been the clear bright spot for demand.
Vacancy currently sits at 7.0%, but it's expected to compress in the coming quarters as tenants take occupancy of buildings they've already leased. Net absorption over the trailing 12 months totals roughly 151,000 SF, a meaningful swing back into positive territory. Smaller bay properties under 100,000 SF continue to face the most competition from newer supply, while availability among larger bulk distribution buildings has declined sharply — of the roughly 50 buildings in the submarket larger than 100,000 SF, only a handful remain available for lease.
Recent leasing has been dominated by aerospace, defense, and supporting manufacturing tenants:
In Signal Hill specifically, activity has been steadier and smaller in scale — Signal Hill Commerce Center (2698 Junipero Ave) and Signal Hill Business Park (2667 E 28th St and 2850-2898 Orange Ave) have each seen multiple deals over the past year, with vacancy in those buildings running well below the broader submarket average.
Building owners have reduced asking rents for several years amid softer demand and rising availability. Weighted-average rents across Los Angeles County are down nearly 25% from peak levels. In the South Bay submarkets closest to the ports — including Long Beach and Signal Hill — rents are down roughly 30%, falling from averages near $2.00/SF monthly to a more common range of $1.50 to $1.75/SF. Current asking rents average approximately $1.65/SF monthly, modestly above the broader Los Angeles market.
Rents are expected to end 2026 close to flat year-over-year, with an upward trajectory resuming in 2027 and accelerating in 2028. Despite the recent softening, in-place tenants continue to see rent increases upon lease expiration, reflecting the strength of the 2021–22 rent spike still working its way through the market.
Following a wave of recent deliveries, the under-construction pipeline has thinned considerably — down to roughly 24,000 SF as of this quarter, limited to a single small building underway in the area. Recent notable completions include Goodman Commerce Center (505,000 SF, fully leased to Amazon) and the two-building Long Beach Logistics Center delivery adjacent to the 710 Freeway.
Over the past decade, roughly 3.5 million SF of industrial space has been delivered in Long Beach, outpacing neighboring South Bay submarkets, while about 1.0 million SF of older inventory was demolished — a net inventory gain of more than 10%.
Sales activity is rebounding gradually after a low of 25 transactions in 2024. Over 40 deals closed in 2025, driving nearly $700 million in volume, though deal flow slowed again in early 2026. Most individual building sales fall below $10 million and trade among private investors, but two large portfolio transactions moved the needle this cycle:
In Signal Hill, Signal Hill Commerce Center (2698 Junipero Ave, 31,824 SF, built 1985) traded for $9,470,437, or $298/SF — one of the higher-profile individual sales in the submarket over the past year. Cap rates for the submarket typically range from 5% to 6%.
Q: What is the current industrial vacancy rate in Long Beach and Signal Hill?
A: Vacancy is at 7.0%, though it's expected to compress as tenants take occupancy of recently leased buildings.
Q: What's driving industrial demand in this submarket?
A: Aerospace, defense, and rocket-manufacturing tenants clustered in the "Space Beach" area have been the primary driver of recent leasing activity and absorption.
Q: What are current asking rents for industrial space?
A: Asking rents average approximately $1.65/SF monthly, down roughly 30% from peak levels but modestly above the broader Los Angeles market average.
Q: Is there much new industrial construction underway?
A: Very little. The under-construction pipeline has thinned to roughly 24,000 SF as of this quarter, following a wave of recent deliveries.
Q: What are cap rates running for industrial sales in this market?
A: Cap rates for Long Beach and Signal Hill industrial properties typically range from 5% to 6%.
Q: How do I find out what my industrial property is worth in today's market?
A: Ron Mgrublian provides a complimentary Broker Opinion of Value for industrial property owners in Long Beach, Signal Hill, and the surrounding submarkets — with no cost and no obligation.
Market data sourced from CoStar Group, licensed to Lee & Associates.
We specialize in industrial real estate from the greater Los Angeles to the Inland Empire markets, including: Long Beach, Carson, Torrance, Gardena, Compton, Rancho Dominguez, Wilmington, Paramount, Santa Fe Springs, Huntington Beach, Garden Grove, Irwindale, Signal Hill, Pomona, City of Industry, and Ontario, serving surrounding submarkets including LA South Bay, LA Central, Mid-Counties, San Gabriel Valley, Orange County and the Inland Empire.
Ron Mgrublian
Principal, Lee & Associates Los Angeles – Long Beach
Direct: 562-354-2537
5000 E Spring St, Suite 600, Long Beach, CA 90815
CalDRE# 01902882
