2026 Look Ahead: Opportunity in California Industrial Real Estate
A Capital Perspective from Dedeaux Properties LLC
The past few years have tested even the most disciplined industrial real estate owners and developers. Rising interest rates, shifting trade policy, construction cost volatility, and a historic reset in tenant demand have forced the market to slow, recalibrate, and reprice. For many, it has been an uncomfortable pause.
For Dedeaux Properties, it has been a period of preparation.
As we look ahead to 2026, we believe the industrial sector — particularly in Southern California — is entering the early stages of its next opportunity cycle. Supply growth is at multi-decade lows – U.S. industrial deliveries fell to 281 million square feet in 2025, the lowest since 2017, as speculative construction retrenched and occupiers increasingly favored built-to-suite product. With vacancy stabilizing near 7% nationally and Southern California markets remaining relatively tight, capital is becoming more selective (but more constructive), and logistics users are refocusing on operational efficiency vs. expansion [1]. These conditions favor experienced operators with local knowledge, patient capital, and long-standing tenant relationships.
That is where Dedeaux has always thrived.
Built From the User’s Perspective
Dedeaux was founded nearly 20 years ago with a fundamentally different perspective than most developers: we came from logistics users before we were real estate owners. The Dedeaux family’s operating background in transportation and distribution continues to inform how we design, acquire, and reposition industrial assets today.
That user-first mindset has allowed us to consistently deliver facilities that function better — from clear heights and truck court depths to trailer parking ratios, yard configurations, and power capacity. It is also why many of the country’s leading national logistics, transportation, and distribution companies have chosen to grow alongside us across multiple cycles. Dedeaux positioned itself at the forefront of the Industrial Outdoor Storage (IOS) segment - an asset class that has achieved 123% cumulative rent growth since 2020, according to Newmark Industrial – more than twice the rate of bulk warehouses (58% over the same period). Transport, logistics, and fleet operators are typical users for IOS sites, in addition to equipment and bulk materials storage/rental operations [2].
Today, Dedeaux owns and operates more than 14 million square feet of industrial real estate with over $1.3 billion of assets under management, spanning cold storage, distribution, transloading facilities, truck terminals, and industrial outdoor storage (IOS). Our portfolio is concentrated where supply chains matter most: Central Los Angeles, the Inland Empire, and key infill markets up and down the California coast.
A Cycle That Rewards Discipline
There is no denying that the industrial market has been in a corrective phase. Leasing velocity slowed, vacancy rose, and development economics became more challenging as tariffs and construction costs fluctuated. But cycles do not end demand — they reshape it.
Industrial vacancy in Southern California has climbed from pandemic lows, but is stabilizing as new supply slows; Los Angeles County sits around ~6% vacancy and Inland Empire vacancy near ~8% [3].
New construction across Southern California has slowed materially, with development pipelines now among the leanest in the past decade. At the same time, regulatory constraints, zoning limitations, and infrastructure realities continue to restrict future supply, particularly for transportation-oriented and outdoor storage assets. As absorption improves, these dynamics will matter.
We believe 2026 will mark a transition from reset to recovery — not a return to speculative excess, but a more rational, user-driven market. The winners will be properties that solve real operational problems and owners who can move decisively when opportunities arise.
Ready to Act, Not React
Over the past two years, Dedeaux has focused on strengthening its foundation:
- Proactively managing the balance sheet
- Completing and leasing high-quality developments in a challenging environment
- Recapitalizing assets and deepening institutional capital relationships
- Advancing entitlements and redevelopment plans across Central Los Angeles
- Expanding leadership to support growth, with deep experience in capital markets, asset management, and operations
As a result, we enter 2026 with a clean platform, dry powder, and a pipeline that includes acquisitions, redevelopments, and selective new redevelopment — particularly in specialized asset classes like IOS, truck terminals, and infill logistics facilities where barriers to entry remain high.
We are not waiting for perfect clarity. Real estate opportunity rarely arrives with consensus. And no matter the underwriting and preparation, there is an inherent risk to real estate investing.
Long-Term Conviction in Southern California
Southern California remains one of the most complex — and compelling — industrial markets in the world. It is land-constrained, regulation-heavy, and operationally demanding. Those challenges are precisely what protect long-term value for firms that understand the market deeply.
From the ports of Los Angeles and Long Beach to last-mile infill submarkets, logistics users continue to prioritize proximity, reliability, and efficiency. As supply chains evolve — whether through reshoring, nearshoring, or re-optimization — the need for well-located, functional industrial real estate will persist.
Dedeaux has spent two decades building the relationships, expertise, and credibility required to operate successfully in this environment. We have navigated multiple cycles, partnered with institutional capital through both expansions and downturns, and delivered for tenants when execution mattered most.
Looking Ahead
The market may still feel uncertain, but opportunity is quietly taking shape. Capital is re-engaging. Tenants are making decisions again. And supply constraints are setting the stage for the next period of growth.
At Dedeaux, we are optimistic — not because the road has been easy, but because we are prepared.
Prepared by experience.
Prepared by relationships.
Prepared to take advantage of what comes next.
Leading the way in logistics real estate
[3] https://www.cbicommercial.com/blog/los-angeles-industrial-real-estate-property-market-update-q4-2024