Los Angeles industrial real estate market report

Q3 2022

The Los Angeles industrial market remains to be a landlord’s market as average asking rents continue to record new all-time highs with some properties asking over $2.00 psf. Recently, investors have been active in search for new investment opportunities but as the Fed continues to battle inflation with the recent interest hike, sale activities could soften moving forward. Additionally, the cost of shipping goods from China has slumped to the lowest level in more than two years. Lately, consumers have cut back on spending due to rising inflation and have shifted away from goods to services. This can apply downward pressures on demand and should be monitored closely.
558.2 msf

Inventory

Over 1.3 msf was delivered in the third quarter pushing flex and industrial inventories over 50,000 sf to 558.2 msf. Currently, there is 4.3 msf under construction.
378 ksf

Net Absorption

Los Angeles for the first time since 3Q 2020 reported negative with (378,358) sf.
$1.50 psf

Asking Rent

Average asking rents are up 34% from the year prior, concluding the quarter at $1.50 psf triple-net.
23.1 msf

Availabilities

Total available industrial and flex space increased to 23.1 msf market-wide, making it the third consecutive quarter of increased availabilities.
2.0%

Vacancy

Total vacancy climbed to 2.0%, up 10 basis points (bps) from the prior quarter. 10.9 msf of direct and 1.2 msf of sublet space were reported vacant in the third quarter, respectively.
$343.31 psf

Investment Sales

Although transaction activity may have slowed from 41 to 29 transactions in the third quarter, the average sale price for industrial properties continue to break records with a new market high of $343.31 psf.
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