Industrial Leasing Activity in Greater LA at Best Levels
By Anthony Russo | GlobeST | October 13, 2025
Deal activity in Greater Los Angeles' industrial sector is flying to its highest levels since the beginning of the pandemic. Total gross activity, which includes new leases and sales, in year-to-date through the third quarter was 79.1 million square — the best three-quarter period since 2020, according to a market report from Colliers.
Also, the 26.8 million square feet posted in the third quarter represented a 14 percent increase from the previous three months.
Additionally, net absorption turned positive, going from -1.13 million square feet in the 12 months before to +1.27 million square feet.
Meanwhile, there were plenty of negative trends. Most notably, Greater LA industrial rents continue to be sluggish, as the category saw a 10.3 percent dip year-over-year to $1.24 per square foot. Moreover, that marked the ninth straight quarter of declines, with rents down 29 percent from the peak in the second quarter of 2023.
Vacancy spiked by 90 basis points from the previous 12 months to reach 5.7 percent. That came as "7.4M SF of new supply offset the gains from positive net absorption," according to Colliers.
But here's the good news. While deliveries increased —construction went from 19.57 million square feet to 12.05 million square feet.
"Construction activity fell below 15M SF for the first time in thirteen years," Colliers explained.
That could be a trend to watch in the coming quarters, as industrial landlords hope for better fundamentals across the board. Colliers did not provide an outlook.
Southern Cal Emerges as Key Data Center Hub
By Richard Berger | September 08, 2025 | GlobeST
The lack of available power in the US, record low data center vacancies across the US and the region's position as the entertainment capital are driving Southern California’s Data Center resurgence, according to JLL.
“[Entertainment] is creating significant demand for streaming and content creation, edge computing and low-latency services, and major cloud providers expanding for local demand to service the 23 million+ people in the region,” Darren Eades, managing director at the brokerage, said.
That, combined with the area's role as an international gateway for trans-Pacific connectivity to APAC and a telecom fiber hub at One Wilshire, makes it a strategic location.
After a period of stagnation, Los Angeles – with its 305-megawatt (MW) of operational capacity set – is to double if the planned pipeline is approved, according to Cushman & Wakefield’s 2025 Global Data Center Market Comparison.
The timing of approvals depends on a variety of factors, including decisions from planning and permitting authorities or announcements from developers, John McWilliams, head of data center insights, Cushman & Wakefield, told GlobeSt.com.
“These variables make it difficult to predict when approvals will be finalized,” he said. “However, the resurgence of data centers in this area reflects the growing demand for infrastructure in a market that offers both strategic advantages and the capacity to support large-scale projects.”
El Segundo and Vernon continue to be a focus for new data center development, with several projects in the pipeline, such as one in Monterey Park set to begin this year.
“Vernon became a focal point for data centers after JLL worked with Prime Data Centers to plant their flag in the City,” Eades noted.
“Vernon has cheaper power due to its own generation plant and has realized the major benefits to the City of attracting data centers. Since Prime, three other data centers are under construction and in planning stages. This should, however, tap the City of power, thus forcing operators to look elsewhere for opportunities.”
McWilliams talked more in-depth about the city, touting its proximity to downtown LA, density, industrial zoning and power costs.
“Additionally, Vernon’s municipal utility provides reliable power, and the city’s ability to operate somewhat independently allows for streamlined permitting and site development processes, which are key advantages in a competitive market," he said.
Currently, there are 64 operational data centers in the LA market, with 48MW under construction that is expected to come online within the next three years, according to McWilliams.
“While there are projects in the planning phase, it’s unlikely they will progress to operational status within that same timeframe due to the complexities of the development process,” he said.
Prologis Report Signals End of Globalization Era for Supply
By Kristen Smithberg | September 30, 2025 | GlobeST
The global supply chain is undergoing a transition driven by prioritization of AI-based decision making, regional self-sufficiency and energy resilience, according to Prologis’ 2026 supply chain outlook.
The majority of global business leaders surveyed by Prologis expressed optimism about 2026 supply chain performance, but many are implementing changes to address potential risks. More than half said they have deployed new technology or installed risk monitoring systems and nearly half said they have increased safety stock in response to recent disruptions.
A new emphasis on localized production is aligning the supply chain around major cities and moving operations closer to end markets, a departure from the historical strategy of chasing the cheapest global labor. About 58% of business leaders said they expect more local supply chains by 2030, and more than three-quarters indicated they are already implementing regional self-sufficient networks. Only 31% said they expect continued globalization.
“This represents a fundamental shift from cost-optimization to risk-mitigation as the primary business strategy,” said Prologis.
“Organizations must prepare for a post-globalization era where proximity and control outweigh traditional cost advantages. Strategic planning must account for higher operational costs offset by reduced risk exposure and improved operational reliability, marking the end of the globalization era in supply chain design.”
Seventy percent of organizations worldwide said they have implemented transformational or advanced AI, and by 2030, business leaders expect AI to drive the majority of supply chain decisions across all major functions, according to the report. About one-quarter of leaders surveyed said they have already achieved AI-driven decision-making as a standard. As such, AI was the top investment priority among business leaders, with three-quarters saying it is their most important priority, followed by supplier relationships, automation and energy efficiency.
“The gap between AI leaders and laggards will widen rapidly, making immediate strategic commitment to AI implementation essential for long-term competitiveness,” Prologis said.
Energy disruptions are a major concern for business leaders, with 89% saying they have experienced this in the past year. Eighty-three percent said energy reliability is likely to be the next major supply chain crisis, especially as power requirements are expected to increase up to 50% over the next five years, largely driven by AI power demands.
Energy efficiency now outranks labor costs and tariffs as the top driver of location decisions. Nearly all business leaders surveyed said they are willing to pay premium prices for reliable energy infrastructure. About 80% of those surveyed said they would relocate once logistics costs increase 16% or more, and a similar percentage said they’d do the same after one to five major power outages per year.
“Companies need comprehensive energy strategies that address both current vulnerabilities and future capacity requirements, making energy infrastructure a core competency rather than a supporting function,” said Prologis.
