Q2 2023 Industrial Market Outlook – Los Angeles
L.A. County’s industrial market is shifting from high demand for warehouse space, resulting in an increase
in excess space available for sublease. The market has observed a significant surge in the marketing
of sublease space, with a 94.5% increase from the previous quarter and a remarkable 304% increase
compared to a year ago. As of midyear 2023, the total vacant sublease space amounts to 4.7 million
square feet, which surpasses the level observed during The Great Recession in Q2 2009 by 55.6%.
TRENDS TO WATCH
Companies that expanded their warehouse space throughout the pandemic to accommodate the
e-commerce surge have actively been reducing excess space. In Q2, the industrial market reached an
all-time high in available space for sublease, indicating that companies have overestimated their space
requirements. This has led to a significant increase in the market, with approximately 2.3 million square
feet of additional vacant sublease space listed during the second quarter, marking the largest quarterover-
quarter increase on record. Moreover, 2.7 million square feet of vacant space was directly added to
the market, accompanied by 300 thousand square feet of completed construction.