Q4 2022 Industrial Market Outlook – Los Angeles
The industrial market in Los Angeles County saw an uptick in vacant space as supply chain issues eased and warehouse space for cargo coming from the ports of Los Angeles and Long Beach increased in Q4 2022. The vacancy rate for industrial space moved to 2.2 percent, up 50 basis points year over year, as approximately 4 million square feet of completed construction was added to the market since the start of the year. Vacant industrial space increased 32.9 percent year over year, while the average asking rent increased 36.9 percent to $1.67 per square foot triple net. With demand for warehouses still robust and rents rising, developers continued building new projects to meet demand. More than to 6.3 million square feet of industrial space remained under construction at year end. However, completed construction in Q4 2022 decreased 9.7 percent from Q4 2021.
TRENDS TO WATCH
For years demand for industrial space has outpaced the supply in Los Angeles County as development, rent, and sale prices remained strong in 2022. With the availability of industrial space improving, the imbalance will lessen – providing opportunity for tenants that otherwise had limited options.