Southern California Industrial Real Estate Faces Tariff Uncertainty

Southern California, September 7, 2025

News Summary

The industrial real estate market in Southern California, especially around the Los Angeles County ports, is experiencing a significant slowdown due to recent tariff announcements by President Trump. With businesses uncertain about the future of trade policies, leasing activities have decreased, leading to predictions of a 25% drop in imports and increased vacancy rates. Analysts caution that these macroeconomic uncertainties could critically affect the local economy, prompting businesses to reassess their expansion plans and purchasing orders in the wake of potential tariffs.

California – The industrial real estate market in Southern California, especially around the Los Angeles County ports, is experiencing a slowdown due to potential widespread tariffs announced by President Trump. Demand for warehouses, which are critical for importing goods, is expected to decrease significantly amidst rising uncertainty surrounding these trade policies.

The leasing of facilities for the collection and distribution of imported products has already seen a temporary dip as businesses hold back on decisions pending the outcome of tariffs. Recently, Trump announced a temporary delay in implementing new tariffs for a period of 90 days, but he simultaneously increased the tax rate on Chinese imports to 125%. Economists predict these adjustments could lead to a staggering 25% drop in imports, negatively impacting the industrial market, which may experience higher vacancy rates and a slowdown in new construction projects.

With the uncertainty surrounding tariffs, many business owners are hesitant to expand their operations. This caution is prevalent in industries that typically move a wide array of consumer goods—ranging from electronics to apparel—through regional warehouses. Economists warn that the overall trade environment could critically affect the Los Angeles area economy, which relies heavily on trade as a primary growth driver.

Specific tariff rates have also been set, with duties reaching 24% on imports from Japan and 25% on South Korean goods. However, Canada and Mexico are currently exempt from the baseline tariff rates. As tariffs may result in an estimated $800 billion reduction in goods trade and a projected 25% decline in imports by 2025, businesses are adjusting their purchasing orders, grappling with the unpredictability around cost structures forged by the tariff landscape.

This unpredictability has created delays in tenant decision-making regarding facility expansions and a general slowing of economic growth forecasts, which are unable to fully account for the evolving tariff situation. Despite these uncertainties, there has been a recent uptick in demand for industrial properties across certain sectors, including aerospace and consumer goods distribution. However, the completion of new industrial properties in Southern California hit a 10-year low in 2024, contributing to declining vacancy rates and rising rents.

Rexford Industrial Realty, a leading company in Southern California’s industrial real estate market, owns 425 properties totaling over 50 million square feet. Real estate remains a crucial component of family-owned businesses’ strategies for future wealth-building and legacy planning, even amid these challenging times.

Overall, sentiment among real estate analysts remains cautiously pessimistic as macroeconomic uncertainties continue to affect market dynamics. The outlook hinges significantly on trade policies and their potential repercussions on business operations and the industrial real estate landscape.

FAQ

Key Features of the Situation

• Location: Southern California, particularly near Los Angeles County ports
• Current State: Slower leasing and business expansion
• Impact of Tariffs: Expected reduction in imports and increased vacant spaces in warehouses
• Outlook: Cautious sentiment among investors and businesses
• Future Predictions: 25% drop in imports by 2025 and significant cost adjustments ahead for businesses

Deeper Dive: News & Info About This Topic

• Los Angeles Times: Tariffs Chill Southern California’s Vast Industrial Property Market
• Bain Capital: Staley Point Capital and Bain Capital Complete Sale of Two Southern California Industrial Properties
• Seeking Alpha: Rexford Industrial Realty – A Pure Play on the SoCal Industrial Real Estate Rebound
• CoStar: World’s Largest Industrial Real Estate Firms Suffer From Tariff Uncertainty
• Google Search: Industrial Real Estate Southern California

Author: STAFF HERE MISSION VIEJO WRITER

MISSION VIEJO STAFF WRITER The MISSION VIEJO STAFF WRITER represents the experienced team at HEREMissionViejo.com, your go-to source for actionable local news and information in Mission Viejo, Orange 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 Oso Fit 5K Fun Run and Community Health Fair, Walk Against Drugs & Community Fair, and National Night Out. Our coverage extends to key organizations like the Mission Viejo Chamber of Commerce and Providence Mission Hospital Mission Viejo, plus leading businesses in retail and education that power the local economy such as The Shops at Mission Viejo, Capistrano Unified School District, and Amazon Delivery Station. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECostaMesa.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HERESanDiego.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.