Industrial properties continued to perform strongly in Q2, with the Inland Empire outpacing the greater Los Angeles area. The future of office space remains an open question, as defaults are on the rise and further rate hikes from the Federal Reserve are predicted before the end of the year.

The post-pandemic recovery in employment levels for the Los Angeles area has been slow relative to the nation, and, depending on their duration, the combined effects of the WGA and SAG-AFTRA strikes may adversely impact the LA economy. In Los Angeles, transportation firms have grown payrolls by nearly 10% since February 2020, while accommodations payrolls are 13.5% lower. Heavy traffic through the ports of Long Beach and Los Angeles, combined with the demands of e-commerce, continue to drive demand for logistics solutions in the industrial sector. However, a slow down in Asian imports combined with ongoing labor disputes between the International Longshore and Warehouse Union and the Pacific Maritime Association is beginning to cool an over-performing sector.

In the following pages, we outline the major market trends in the Los Angeles and Inland Empire market sectors, along with key indicators. In today’s quickly changing environment, we remain ready to assist you with your commercial real estate valuation needs at any time.