Southern California, September 7, 2025

News Summary

The industrial real estate market in Southern California, particularly around Los Angeles ports, is facing significant challenges due to President Trump’s tariffs. A projected decline in warehouse demand has halted leasing decisions among businesses awaiting tariff clarity. Tariffs, with rates up to 125% on certain imports, may result in a notable reduction in overall imports and increased vacancy rates. Despite these challenges, some sectors, like aerospace, are experiencing a slight uptick in demand. Analysts express caution as the long-term effects of tariffs continue to unfold in the industrial landscape.

California

The industrial real estate market in Southern California, especially around Los Angeles County ports, is experiencing notable impacts due to President Trump’s tariffs. A decrease in demand for warehouses has been projected, triggered by uncertainty surrounding potential widespread tariffs.

Businesses that typically lease facilities for the collection and distribution of imported goods are currently halting their decisions as they await clarity regarding tariff outcomes. Although President Trump announced a 90-day temporary delay on the implementation of certain tariffs, he also increased the tax rate on Chinese imports to an unprecedented 125%, which is expected to create long-term repercussions for the industrial market.

Economists have predicted that these tariffs could lead to a significant 25% decline in imports, adversely affecting the industrial sector. Effects could include rising vacancy rates in warehouse facilities and a slowdown in new construction activities. Many business owners are expressing a reluctance to expand operations due to the unpredictability of tariffs and their potential impact on consumer demand.

Effects of Tariffs on Trade and the Economy

Tariffs have been issued targeting various countries, with duties ranging from 24% on Japan to 25% on South Korea. Canada and Mexico remain exempt from these baseline tariffs. Predictions suggest that by 2025, tariffs could result in an $800 billion reduction in total goods trade, largely driven by the anticipated decline in imports.

As businesses navigate these turbulent waters, they are altering their orders to manage cost uncertainties and prepare for changes in product pricing due to the tariffs. The overall economic forecasts are struggling to account for the unpredictability of tariff policies, leading to delays in tenant decision-making regarding expansion among many firms.

Current Market Conditions

Rexford Industrial Realty, a major player in the Southern California industrial real estate market, currently manages 425 properties totaling more than 50 million square feet. While uncertainties linger, recent data has shown an uptick in demand for industrial properties in sectors such as aerospace and consumer goods distribution, signalling that not all sectors are uniformly affected by tariff policies.

The completion of new industrial properties has reached a 10-year low as of 2024, a situation contributing to declining vacancy rates and increasing rental prices across the region. Real estate remains a key element for many family-owned businesses, influencing both their long-term success and wealth-building strategies.

Analyst Sentiment

A cautious sentiment persists among real estate analysts, reflecting broader macroeconomic uncertainties that continue to challenge stakeholders in the region. As the situation evolves, businesses and investors alike will need to adjust their strategies to navigate the ongoing impact of tariffs on the industrial real estate landscape.

Key Takeaways

• Demand for warehouses near Los Angeles ports projected to decline.
• Leasing activity has slowed as businesses await tariff outcomes.
• Economists predict a 25% drop in imports, intensifying industrial challenges.
• Major tariffs range from 24% to 25% on certain countries, with exemptions for Canada and Mexico.
• Rexford Industrial Realty continues to expand despite market uncertainties.

FAQ

Deeper Dive: News & Info About This Topic

• Los Angeles Times: Tariffs Chill Southern California’s Vast Industrial Property Market
• Google Search: Southern California industrial real estate
• Seeking Alpha: Rexford Industrial Realty – Pure Play on the SoCal Industrial Real Estate Rebound
• Google Scholar: California industrial real estate market
• CNBC: Elliott Sees Opportunities to Create Value at Warehouse REIT Rexford Industrial
• Encyclopedia Britannica: Tariffs Impact on Trade
• CoStar: World’s Largest Industrial Real Estate Firms Suffer from Tariff Uncertainty
• Google News: Southern California industrial market
• DWS: Southern California Industrial Market Prospects in Uncertain Times

Author: STAFF HERE BEVERLY HILLS WRITER

The Beverly Hills Staff Writer represents the experienced team at HEREBeverlyHills.com, your go-to source for actionable local news and information in Beverly Hills, Los Angeles County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Rodeo Drive Concours d'Elegance, the Beverly Hills artSHOW, Concerts on Canon, and holiday celebrations throughout the city. Our coverage extends to key organizations like the Beverly Hills Chamber of Commerce and Visit Beverly Hills, plus leading businesses in luxury fashion, hospitality, and entertainment that drive the local economy. As part of the broader HERE network, including HERELosAngeles.com, HERESantaAna.com, HEREHuntingtonBeach.com, and HERECostaMesa.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.