• There is a strong correlation between inbound TEUs and Greater LA’s industrial vacancy rate.
• New deliveries have weighed on fundamentals despite an uptick in port volumes.
• Volatility throughout 2025, with front-loaded volume, is creating some noise in typical market behavior.
• Rents have come down from record highs, making the market more affordable for occupiers than it had been in recent years.
• Labor stability and stabilizing fundamentals make Greater LA a market worth investigating further for investment.

Over the past two decades, loaded inbound TEUs through the San Pedro Bay ports — Los Angeles and Long Beach — and industrial vacancy across Greater LA — including the Inland Empire and Orange County — have typically moved in opposite directions: when trade slowed, vacancy climbed, and when imports surged, space tightened. The relationship between port activity and warehouse fundamentals has long been one of the region’s most reliable economic indicators, reflecting how closely Southern California’s industrial base is tied to global trade and consumer demand. 

During the GFC, inbound volumes dropped from 8.1 million TEUs in 2006 to 6.0 million in 2009, while vacancy rose from 3.5% in 2007 to more than 7% by 2010 as occupiers shed space and delayed expansion plans. The pattern reversed during the pandemic boom: 2021 imports hit a record 10.1 million TEUs, driving vacancy below 1% across the 1.7-billion-square-foot market. Warehouses near the ports were effectively full, and competition for modern space pushed rents to unprecedented highs, marking one of the tightest industrial markets ever recorded in the U.S. 

In 2024, imports bounced back to 10.1 million TEUs, but vacancy increased to 5%, reflecting 26 million SF of construction deliveries and a more balanced post-pandemic demand environment. So far in 2025, imports total 7.6M TEUs, with vacancy sitting near 5.7%.

Colliers Insight

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Throughput at both San Pedro Bay ports has remained steady into fall, though tariff uncertainty and global routing challenges are shaping cargo flows. Long Beach officials expect October volumes to hold firm with a modest dip in November, while Los Angeles leadership continues to emphasize resilience amid shifting trade policies and new fee structures. Both ports signal cautious optimism for Q4, noting that softer demand and scheduling disruptions could temper recent strength.

Labor stability is another positive factor. West Coast dockworkers signed a new contract in 2023 that runs through mid-2028, removing the threat of strikes at the Ports of LA and Long Beach. On the East and Gulf coasts, a temporary shutdown in late 2024 was resolved with a new six-year agreement in early 2025. With both coasts now under long-term contracts, the risk of cargo rerouting due to labor disruptions has largely eased.

Average rents have declined for nine consecutive quarters, falling roughly 29% from the peak as landlords lean on concessions. The construction pipeline is finally tapering, setting the stage for a potential rebound in market fundamentals by mid-to-late 2026, especially as new supply slows and demand stabilizes near the ports.