The L.A. industrial market is booming—and it also may be recession proof. According to new research from Ten-X, the market passes the cyclical stress test for 2019/2020, with a prediction that vacancy rates will drop in 2021. In the nearer term, net absorption is expected to outpace out pace completions by one million square feet through 2018, bringing the vacancy rate in the greater L.A. area to 3%. To find out more about the strength of the market and why it is able to withstand a potential recession, we sat down with Matthew Schreck, quantitative strategist at Ten-X, for an interview.

GlobeSt.com: Why does L.A. industrial have lower than average downside risk?

Matthew Schreck: On the supply side, LA faces fewer supply additions than many markets, reducing the potential downside for fundamentals. Demand wise, trade flows have been picking back up throughout 2017, which is benefitting LA via the market's port exposure and strong distribution network. Combined with the growth of e-retail and storage needs, we think this provides a solid basis for demand that would keep LA industrial fundamentals healthy even in the event of an economic downturn scenario.

Recommended For You

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM Digital Member, you’ll receive:

  • Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.