Vacancy stabilizing; AI lift looming
Regional experts say Greater LA vacancy is stabilizing and rent drops are slowing, with AI and data‑center demand starting to underpin pricing while power constraints are emerging as a growth hurdle. That mix suggests upside for modern, high‑power product and pressure on older stock that can't deliver capacity. (x.com)
Greater Los Angeles recorded an overall industrial vacancy of about 4.6% in Q4 2025, per Cushman & Wakefield’s MarketBeat report. (cushmanwakefield.com) Colliers puts the Inland Empire’s Q4 2025 vacancy at 7.6% with asking rents down only $0.01 QoQ (-0.9%), while Savills’ Q4 report shows a higher 9.4% vacancy—differences reflect submarket definitions and recent big-box move‑ins/outflows. (colliers.com) CBRE’s data‑center briefs show North America data‑center vacancy as low as 1.6% in H1 2025 and note Southern California requirements commonly sizing between 2 MW and 20 MW, driving a flight to powered, modern space. (cbre.com) Hyperscaler and AI demand is already translating into longer commitments—CBRE records 7–10 year lease terms for 2+ MW requirements and notable preleases such as a 7‑MW deal in the region. (cbre.com) Power capacity is the chokepoint: a RAND analysis projects AI data centers could need roughly 68 GW of capacity by 2027, and industry pieces flag grid and permitting constraints as immediate bottlenecks for Southern California expansion. (rand.org) Supply dynamics favor new, high‑power product—Colliers reports construction activity in the Inland Empire fell below 5.0 million SF in Q4 2025, tightening new-class pipeline while firms chase modern, high‑capacity buildings. (colliers.com)
