Los Angeles industrial real estate market report

The Los Angeles industrial market displayed signs of resiliency in Q2 2024 with sublet availabilities decreasing by 9.2% from the prior quarter to 8.7 MSF. Additionally, ongoing labor negotiations at the East Coast ports may consequently boost additional warehouse demand throughout the Los Angeles industrial market as shippers explore alternatives in order to avoid any delays.  Leasing activity increased for the third consecutive quarter with 5.3 MSF leased in Q2 2024. However, average asking lease rates have continued their decline into the second quarter, with rates reported at $1.54/SF, a 21.8% drop from Q2 2023 when the market peaked at $1.97/SF. Additionally, some landlords have been offering additional abatements to attract tenants, something that was not offered during the pandemic expansion period in which availabilities were scarce and often attracted multiple offers.