Tenant Leverage Returns as Southern California’s Industrial Market Moves Toward Balance

Tenant Leverage Builds as Industrial Markets Shows Early Price Stability in Q1 2026

Pricing resets and moderating rents are reshaping conditions across Los Angeles, Orange County, the Inland Empire, and Ventura County.

Quarter-over-quarter sale price gains signal stabilization as Southern California moves deeper into a more balanced cycle.

By J.C. Casillas

Managing Director of Research and Public Relations at NAI Capital Commercial

Southern California’s industrial markets have moved beyond the extraordinary conditions of 2021–2022, when near-zero vacancy, double-digit rent growth, and relentless tenant demand defined the landscape. The region is now settling into a more balanced market.

Here’s where each market stands as this transition continues:

Los Angeles County
Asking Rent: $1.38/sf/mo NNN ▼ 6.8% YoY | ▼ 2.1% QoQ
Median Sale Price: $297/sf ▼ 3.0% YoY | ▲ 6.6% QoQ

Orange County
Asking Rent: $1.49/sf/mo NNN ▼ 3.9% YoY | ▼ 1.3% QoQ
Median Sale Price: $389/sf ▲ 8.1% YoY | ▲ 13.0% QoQ

Inland Empire
Asking Rent: $0.95/sf/mo NNN ▼ 7.8% YoY | ▼ 4.0% QoQ
Median Sale Price: $216/sf ▼ 21.5% YoY | ▼ 15.0% QoQ

Ventura County
Asking Rent Price: $1.09/sf/mo NNN ▲ 0.9% YoY | ▲ 4.8% QoQ
Median Sale Price: $240/sf ▲ 1.3% YoY | ▲ 3.8% QoQ

Occupancy costs, while moderating, remain well above pre-pandemic levels across all four markets. Tenants entering or renewing leases in 2026 are likely to find more negotiating leverage than at any point since 2020, particularly in the Inland Empire, where both rents and sale prices have adjusted most significantly.

Class A warehouse and distribution space in infill locations, especially in Los Angeles and Orange County, is expected to continue outperforming due to the persistent scarcity of developable land.

Sale prices are rebounding quarter-over-quarter in LA, Orange County, and Ventura, as the Inland Empire continues to work through its correction. As tariff uncertainty, interest rate policy, and evolving supply chains continue to influence tenant and investor behavior, Southern California’s industrial markets are regaining their footing in 2026.