LA pipeline shrinks 32%
Construction underway in the Los Angeles industrial market has declined about 32%, leaving roughly 4.7 million square feet under construction. Local market commentary frames this as a meaningful pullback in speculative new supply for the region. (x.com) (x.com)
Industrial construction underway in Los Angeles has fallen to 4.7 million square feet, down about 32% from a year earlier. (savills.co.uk) Savills put Los Angeles industrial space under construction at 6.9 million square feet in the first quarter of 2025 and 4.7 million square feet in the first quarter of 2026, a drop of 2.3 million square feet. The same report said deliveries also slowed to 0.4 million square feet year to date from 0.8 million square feet a year earlier. (savills.co.uk) Transwestern’s second-quarter 2025 report also put the pipeline at 4.7 million square feet and said about 75% of those projects were speculative, meaning they were started without signed tenants. The firm said only about 22% of the space under construction was pre-leased. (transwestern.com) The pullback comes after vacancy rose across the market. Cushman & Wakefield said Los Angeles industrial vacancy reached 4.8% in the second quarter of 2025, up from less than 1% three years earlier and the highest level in the past decade. (cushmanwakefield.com) Rents have been falling at the same time. Transwestern said asking rents were down nearly 20% from their 2023 peak by the second quarter of 2025, while Savills said first-quarter 2026 asking rents were $1.29 per square foot per month, down 6.9% from a year earlier. (transwestern.com) (savills.co.uk) Los Angeles is not a market with much spare land, so even a reduced pipeline still matters. Transwestern said demolition of obsolete buildings and constrained land supply were helping prevent the kind of oversupply seen in some other United States industrial markets. (transwestern.com) The market is also tied closely to port traffic and trade policy. The Port of Los Angeles handled 10.24 million twenty-foot equivalent units in 2025, while the Port of Long Beach processed 9.88 million, keeping the San Pedro Bay complex among the country’s busiest freight gateways. (portoflosangeles.org) (polb.com) But cargo and tenant demand have turned less predictable. Savills said landlords and occupiers were taking a wait-and-see approach through early 2026 as trade regulations shifted, and the first quarter posted 632,511 square feet of negative net absorption, meaning more space was vacated than leased. (savills.co.uk) Not every part of the market is weak. Kidder Mathews said first-quarter 2026 demand was picking up from defense, aerospace, satellite, and advanced manufacturing tenants in South Bay cities including Long Beach, Torrance, El Segundo, and Hawthorne. (kidder.com) For now, the Los Angeles industrial story is less about cranes than restraint: fewer projects are moving ahead, and the projects that are moving ahead are entering a market with higher vacancy, lower rents, and uneven leasing demand. (savills.co.uk) (cushmanwakefield.com)
