Colliers: last-mile demand outpaces supply

Colliers’ research on the Los Angeles Basin and its recent Los Angeles transaction commentary point to the same market condition: demand for urban infill and last-mile logistics space is running ahead of available supply. The firm has described the LA Basin as facing an “acute shortage” of warehouses suited to final-mile distribution, and more recent deal commentary from April said investor appetite for infill logistics facilities continues to outpace supply. That imbalance matters most in dense corridors where buildings are close to consumers, highways and labor pools. Colliers said occupiers are willing to pay higher lease rates to reduce the cost of the final leg of delivery, which it called the most expensive part of transportation costs. ### Why do smaller infill buildings keep attracting demand? Colliers said demand is rising for “closer ‘in-town’ smaller final-mile fulfillment centers” as occupiers try to deliver goods in two days or less. (knowledge-leader.colliers.com) The firm said e-commerce changed supply-chain design by requiring more warehouses in more locations, not just larger facilities on the suburban edge. The LA Basin’s geography adds to that pressure. (knowledge-leader.colliers.com) Colliers said the region’s nearly 20 million residents spread across nearly 35,000 square miles create both opportunity and constraints for final-mile operators trying to reach population centers quickly. ### What makes the LA Basin especially tight? Los Angeles County and Orange County are heavily built out, and Colliers said few vacant land parcels remain in Los Angeles County for new final-mile development. (knowledge-leader.colliers.com) In its basin research, the firm said that shortage has produced extremely low vacancy and some of the highest rents in the country for suitable final-mile space. Colliers’ April 7, 2026 note on a 113,500-square-foot industrial sale at 12224 Montague Street in the East San Fernando Valley made the same point in current deal terms. (knowledge-leader.colliers.com) The firm said the submarket is one of the region’s most supply-constrained and that industrial users are still seeking well-located space with limited inventory available. ### Why does location carry so much bargaining power? (knowledge-leader.colliers.com) Colliers said final-mile occupiers weigh population counts, income levels, highway access, ingress and egress, traffic, crime statistics and labor availability when choosing sites. That means not all industrial square footage competes equally; buildings that solve a delivery-network problem can command more attention than generic warehouse space farther from customers. (colliers.com) David Harding, a Colliers executive vice president, said in April that investor appetite for infill logistics facilities “continues to outpace supply,” especially in Los Angeles’ tightest and most strategically positioned submarkets. He said the East San Fernando Valley remains valuable for users trying to serve one of the country’s most densely populated regions. (knowledge-leader.colliers.com) ### Can new development ease the shortage? Colliers said multi-story warehouses could become part of the answer in parts of the basin where land is scarce. The firm identified South Bay, Mid-Counties and parts of Central Los Angeles as areas that could see that format because they sit close to logistics hubs and dense population concentrations. The Inland Empire remains part of that network. (colliers.com) Colliers said the region may lead final-mile distribution in the basin because it can reach the most households within a two-hour drive and still has land for facilities with modern logistics features. ### What should readers watch next? Colliers’ next signals are likely to come through market reports and transaction commentary rather than a single headline metric. (knowledge-leader.colliers.com) The firm’s current Los Angeles market pages and research hub continue to track infill availability, while buyers such as Slater Harding Partners, Foundation Capital Partners and Sierra Ridge Capital are already repositioning scarce Los Angeles assets for modern industrial tenants. (colliers.com)