The industrial market spanning the ports of LA-Long Beach to the Inland Empire showed signs of stabilizing in the second quarter of 2026, even as rents continued to soften across most submarkets. Vacant-available space declined in the South Bay, Mid-Counties, and Central markets, while the Inland Empire posted its second straight quarter of improvement even with new construction picking up. Below is a summary of the macro backdrop and the key numbers for each of the four submarkets we track most closely: South Bay, Mid-Counties, Central, and the Inland Empire.
This summary is based on our full Q2 2026 Industrial Market Insights report. To receive the complete report — including additional charts and market detail — contact Ron Mgrublian directly.
U.S. economic growth picked up in the first quarter of 2026, with real GDP rising at a 2.1% annual rate, up from 0.5% in the fourth quarter of 2025. Inflation showed real signs of cooling by June, with headline CPI easing to 3.5% year-over-year and core CPI down to 2.6%, though that relief was tied in part to lower energy prices following the Iran ceasefire and could prove temporary given renewed tension over the Strait of Hormuz. The labor market cooled further, with nonfarm payrolls adding just 57,000 jobs in June and unemployment holding at 4.2%. Retail and e-commerce spending stayed resilient, with e-commerce's share of total retail activity climbing to 16.9%.
Advanced manufacturing continues to be a meaningful driver of industrial demand across the ports of LA-Long Beach to Inland Empire corridor, led by aerospace, defense, space technology, clean energy, and robotics. Two recent investments stand out: Anduril Industries' $1 billion, 1.18-million-square-foot campus spanning Long Beach and Lakewood, expected to support roughly 5,500 direct jobs, and Vast's $87 million expansion of its Long Beach space-station research and manufacturing operations. This kind of tenant demand favors buildings with heavy power, secure yards, and flexible production space — features that remain in short supply.
Port activity also strengthened. The ports of Los Angeles and Long Beach handled approximately 5.17 million TEUs combined in Q2 2026, up 10.9% year-over-year, with Los Angeles processing 2.73 million TEUs and Long Beach handling 2.44 million TEUs.
Availability in the South Bay improved to 5.3%, down from 6.3% in the prior quarter, after three consecutive quarters of increases. Net absorption turned positive at 542,069 SF. Rents continued to soften, averaging $1.45 NNN, down from $1.47 the prior quarter, while sale pricing averaged $283.88 per square foot. Notable Q2 sales included a portfolio of 11 industrial properties in Carson (419,199 SF) trading for $94.75 million, and a 98,659 SF building on S Vermont Ave in Torrance selling for $31.1 million. On the lease side, Valar Atomics signed for 512,490 SF on Normandie Ave in Torrance, and Divergent Technologies leased 415,312 SF on Artesia Blvd in Long Beach.
The Mid-Counties saw availability improve to 6.1%, its third straight quarterly improvement, though net absorption turned negative at -108,552 SF — suggesting the gain came more from reduced listings than stronger tenant demand. Rents fell to $1.22 NNN, down from $1.28 the prior quarter, while sale pricing rose to $308.60 per square foot. Investment sales rebounded sharply, with 26 transactions totaling $337.9 million, led by McMaster-Carr Supply Co's $134.5 million purchase of a four-property portfolio in Santa Fe Springs. On the leasing side, Delivrae Inc. signed for 220,000 SF on Trojan Way in La Mirada.
Availability in the Central market fell to 5.0%, the lowest level since Q4 2023, with positive net absorption of 200,390 SF. Rents held relatively steady at $1.34 NNN, while sale pricing reached $352.53 per square foot — the strongest pricing of any submarket this quarter, with average cap rates compressing to 5.5%. Notable sales included Blue Owl Capital's $43.3 million purchase of a 96,948 SF building on Colorado Blvd in Los Angeles. On the leasing side, Line Apparel signed a 375,000 SF direct lease on Union Pacific Ave in Commerce.
The Inland Empire improved for a second consecutive quarter, with availability falling to 7.5% and net absorption of 778,305 SF. Rents rose modestly to $0.98 NNN, while sale pricing declined to $190.69 per square foot as larger, land-intensive properties traded. Under-construction inventory climbed to 7.63 million SF, the highest of any submarket, which may temper further improvement in availability. Investment sales surged, with 69 transactions totaling roughly $1.18 billion — more than double the volume from a year ago — including Premier Logistics Properties' back-to-back purchases in Rialto totaling over $270 million. On the leasing side, Centric Brands signed for 830,750 SF in San Bernardino and Walmart leased 656,661 SF in Jurupa Valley.
Across the board, the ports of LA-Long Beach to Inland Empire industrial market is showing early signs of stabilization after several quarters of rising vacancy and softening rents. Owners in tighter submarkets like Central and South Bay may start to see improved leverage as availability declines, while tenants across all four submarkets still have room to negotiate given where rents sit relative to a year ago. For owners considering a sale, current pricing in the Central and Mid-Counties markets in particular reflects continued investor appetite for well-positioned industrial assets.
If you're weighing a sale, evaluating a 1031 exchange, or simply want to know where your property stands in today's market, we provide a complimentary Broker Opinion of Value for industrial and warehouse property owners across the ports of LA-Long Beach to Inland Empire markets. Request your complimentary valuation to get a data-driven starting point.
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.
Q: Which submarkets from the ports of LA-Long Beach to the Inland Empire does this report cover?
A: This report covers South Bay, Mid-Counties, Central, and the Inland Empire — the core submarkets Ron Mgrublian tracks from the ports of LA-Long Beach to the Inland Empire industrial corridor.
Q: Which submarket had the tightest industrial vacancy in Q2 2026?
A: The Central market had the lowest availability at 5.0%, its tightest level since Q4 2023, followed by South Bay at 5.3%.
Q: Are industrial rents still declining from the ports of LA-Long Beach to the Inland Empire?
A: Yes, in most submarkets. South Bay, Mid-Counties, and Central all saw NNN asking rents soften quarter-over-quarter, while Inland Empire rents ticked up slightly to $0.98 NNN.
Q: Where is industrial construction activity concentrated right now?
A: The Inland Empire has by far the most under-construction inventory at 7.63 million SF, well above the other three submarkets combined.
Q: What's driving new industrial demand beyond e-commerce and logistics?
A: Advanced manufacturing — particularly aerospace, defense, space technology, and clean energy — is an emerging demand driver, highlighted by large recent investments from companies like Anduril Industries and Vast in the Long Beach area.
Q: How can I find out what my industrial property is worth in today's market?
A: Contact Ron Mgrublian for a complimentary Broker Opinion of Value, which provides a data-driven estimate of your property's current market value at no cost and with no obligation.
Q: How can I get the full Q2 2026 Industrial Market Insights report?
A: This post summarizes key findings from our full quarterly report. Contact Ron Mgrublian directly at 562-354-2537 or rmgrublian@leelalb.com to receive the complete report.
Ron Mgrublian
Principal, Lee & Associates Los Angeles – Long Beach
Direct: 562-354-2537
Email: rmgrublian@leelalb.com
CalDRE# 01902882
