Southern California's industrial market closed out 2025 with a late surge, as roughly $1.2 billion in industrial properties changed hands in the fourth quarter and buyers crowded back into the last‑mile logistics game. Capping the action was a splashy institutional purchase near LAX that underscored just how scarce modern distribution space has become across the region.
Sales volume climbed about 6% year over year to approximately $1.2 billion in Q4, according to CBRE, which also pegged the quarter's average price per square foot at close to $312. The firm noted that vacancy inched up modestly from the prior quarter, even as the market's streak of negative absorption eased compared with earlier in the year.
Private Money Muscles In On Industrial Deals
Private buyers made up about 63.8% of industrial acquisitions last year, while REITs accounted for roughly 7.7%, a shift that helped keep transactions moving, as reported by Bisnow. Michael Longo, a senior vice president at CBRE, told Bisnow that "we're getting to a point where you can kind of call a bottom on the fundamentals," adding that better debt liquidity and more clarity in the market drew more buyers back into the hunt.
LAX Play Highlights Last‑Mile Hunger
According to CoStar data, the quarter's headline trade was Morgan Stanley's purchase of a newly built 143,060‑square‑foot facility at 5705 W. 98th St., reportedly for about $211 million, with Amazon taking the entire building. In its press release, Morgan Stanley described the deal as a strategic net‑lease investment next to LAX, emphasizing the property's access to dense consumer bases and its position in a tightly constrained land market. "We are pleased to acquire this facility," the firm said in its announcement.
Vacancy, Rents And Absorption Flash Mixed Signals
Even with the investment pop, the fundamentals are sending a more cautious message. CBRE reports that Los Angeles recorded negative net absorption of about 116,000 square feet in Q4, the smallest quarterly loss in two years, while total vacancy still sat higher than it did a year earlier. Asking rents softened as well, with average direct asking rates around $1.22 per square foot NNN, which helps explain why investors are homing in on new, fully leased properties.
For developers and brokers across Southern California, the lesson is pretty clear: institutional‑grade, well‑located last‑mile assets remain the hottest tickets in town, even as broader metrics mend at a slower pace. Market participants told Bisnow that clearer lending pipelines and improving expectations around interest rates could keep deal activity elevated into 2026, with private capital likely to keep leading the charge.
