Trade Policy Shifts Drive Industrial Real Estate Growth Near Southern California Ports

Industrial real estate in Southern California, particularly near the Ports of Los Angeles and Long Beach, is seeing an unexpected upswing in 2026. Despite ongoing trade policy uncertainty and tariff fluctuations during President Donald Trump's second term, new shipping volumes are significantly benefiting port-adjacent submarkets. The Port of Los Angeles, for instance, recorded its second-busiest July on record, contributing to the region's highest leasing levels in five years during Q2 2026.

This market stabilization is also driven by a radical shift towards advanced manufacturing, with high-tech tenants in defense and space sectors demanding significant warehouse space. The South Bay market alone saw 1.8 million square feet of absorption from aerospace and defense tenants in Q1, including a 500,000-square-foot lease for Valar Atomics in Torrance and 415,000 square feet for Divergent Technologies in Long Beach. While industrial rents have seen short-term declines, they remain 25 percent higher than in early 2020. This sustained demand, coupled with limited new speculative construction, suggests continued upward pressure on rents, especially for Class A properties catering to these specialized industries.