What 12 Months of Change Data Tell Us
The Southern California industrial market in the 100,000 to 200,000 SF range continues to correct. This month we are introducing a new layer of analysis alongside our Hundreds Report: a rolling 12 month change report that tracks every meaningful shift in this size segment across the Inland Empire, Los Angeles, and Orange County. New listings, removals, rate adjustments, investment sale activity, brokerage changes. All of it.
What the data reveals is not a single market story. It is a series of distinct corrections playing out simultaneously, each with its own character, its own pace, and its own warning signals.
Signs of Correction
-- Supply is running 4 to 1. 220 new availabilities entered the market over the past 12 months. Only 64 were removed. For every space that gets leased or withdrawn, four new ones show up. Q1 2026 is on pace to be one of the most active quarters for new supply, with 52 new listings already in January and February alone.
-- Lease rate cuts are accelerating, not moderating. Q4 looked like the market was finding a floor. Q1 came back with the deepest cuts we have tracked. The regional median went from a 5.8% cut to 11.2%. The Inland Empire was the most pronounced, swinging from rate increases in Q4 to an 8.6% median cut in Q1.
-- Concessions are masking the real correction. Five to six months of free rent is now standard on five year deals in the 100,000 - 200,000 SF size range. TI allowances of $1 to $3 PSF are showing up where landlords previously offered nothing. Published rates show a 7% decline. Effective economics are landing well below that when you account for free rent.
-- 14 properties went dark on pricing. They removed asking rates entirely. 9 of those were in Orange County. Landlords are choosing to negotiate spot pricing rather than advertise a declining number. When owners stop publishing rates, they know the market is moving against them. To be fair this is not a new tactic, but it has spread further and wider.
-- 24 Landlords changed their leasing teams. Owners are reevaluating their go to market strategy. The Inland Empire led with 12 changes, followed by Los Angeles at 8 and Orange County at 4. In a market this competitive, positioning, data, and execution matter more than they have in years.
What This Means
If you are a tenant in this size range, you have more leverage and more options than at any point in recent memory. The concession environment means actual economics are better than published rates suggest.
If you are an owner, the market is rewarding teams that know the data, move quickly on pricing, and leave nothing on the table in how they position and market their space. The margin for error in this environmnet is slim.
We put together a 9 slide 100,000-200,000 SF market breakdown that supplements are monthly Hundreds Report so you can be informed to make better decisions. Please reach out on any properties you have that need more horsepower and we're happy to provide new energy and insights to help them move.
Justin
Justin Smith, SIOR 949.400.4786 jbsmith@lee-associates.com (mailto:jbsmith@lee-associates.com)
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