Los Angeles posts decade-high vacancy

Bloomberg reported on April 15, 2024 that industrial vacancies in the greater Los Angeles area had climbed to their highest level in a decade, citing a Colliers report on the region. The move marked a break from the pandemic-era stretch when warehouse space across Southern California was scarce and rents rose rapidly. By early 2026, several brokerage reports showed vacancy still elevated, though some leasing activity had started to improve. The result is a market where broad slack and submarket demand are moving at the same time. ### How high has Los Angeles vacancy actually gone? Bloomberg said in April 2024 that vacancies for industrial buildings in greater Los Angeles had risen to the highest level in 10 years, citing Colliers. Colliers later reported that vacancy in greater Los Angeles reached 5.7% in the third quarter of 2025, with 7.4 million square feet of new supply offsetting positive net absorption. CBRE said Los Angeles ended the first quarter of 2026 with a 5.4% vacancy rate and 8.1% availability. CBRE also said the market posted 934,025 square feet of positive absorption in the quarter, the first positive reading since 2022. ### Why did vacancy rise if leasing demand did not disappear? Colliers said ongoing construction activity in Southern California was putting upward pressure on vacancy and downward pressure on asking lease rates and sales prices. (bloomberg.com) That dynamic can lift vacancy even when tenants are still taking space, because new deliveries can outpace leasing. (cbre.com) Cushman & Wakefield said Los Angeles vacancy was 4.9% in the first quarter of 2025 and 4.8% in the second quarter of 2025, describing both as the highest levels seen in the past decade. Those reports also showed vacancy rising before later signs of stabilization appeared in other brokerage data. (bloomberg.com) ### Where is demand still holding up? CBRE said first-quarter 2026 absorption in Los Angeles turned positive even as vacancy increased. That combination points to a market where some tenants are still expanding or renewing, while the region as a whole remains looser than during the peak. The supplied briefing also pointed to uneven tenant behavior across Southern California, including stronger transportation and warehousing hiring in April and a separate layoff tied to a Skechers operation in Moreno Valley. (assets.cushmanwakefield.com) Those signals suggest demand is still present, but more selective by tenant type and location. ### What does higher vacancy change for landlords and tenants? Colliers said higher vacancy and availability were putting pressure on asking lease rates. (cbre.com) CBRE said asking lease rates in Los Angeles fell to $1.21 per square foot per month on a triple-net basis in the first quarter of 2026. Klein Commercial Real Estate said in a March 2026 market report that direct vacancy in greater Los Angeles was 5.8%, described as a decade high, while average asking rent was down 31% from its peak. That report is not a primary market benchmark on the level of CBRE or Colliers, but it points in the same direction on rent pressure and tenant leverage. (colliers.com) ### Does a decade-high vacancy mean the market is weak everywhere? CBRE said positive absorption returned in the first quarter of 2026, while Colliers said net absorption in greater Los Angeles turned positive in the third quarter of 2025. Those figures show that elevated vacancy does not rule out active corridors or building types. (kleincom.com) Cushman & Wakefield, CBRE and Colliers all showed the same broader pattern: vacancy is materially higher than it was during the tightest years, rents have eased, and parts of the market are still leasing. The next set of Los Angeles industrial reports from the major brokerages will show whether that mix of higher vacancy and selective demand persists into mid-2026. (assets.cushmanwakefield.com) (cbre.com)