The demand for warehouses used to move goods through the ports of the County Los Angeles should decrease if general prices take effect, potentially naming the economic vitality of one of the largest industrial real estate markets in the world.
The rental of the buildings used to collect and distribute imported goods has slowed down at least temporarily while companies are waiting to see if the prices are installed at their rates announced or their ease thanks to negotiations.
President Trump temporarily Wednesday remote on its prices On most nations for 90 days, but increased its tax rate on Chinese imports to 125%.
If the prices cause imports of imports of 25% provided by the tax foundation Think Tank, the result “would be seriously negative for the industrial market” with an increasing vacancy and a slowdown in new constructions, said analyst Jesse Gundersheim.
Many business owners hesitate to develop in a new space because they do not know how the prices will affect the demand, he said.
Among the imports that are generally moving into regional warehouses are electronic consumer goods such as televisions and computers, and clothes, including clothing and shoes.
“Will all these prices set up?” Will some be negotiated? How long will they last? ” said Gundersheim, principal director of market analysis at the Costar real estate data provider. “The unknown around him is not good for business. It is not good for decision -making.”
With Trump's 10% tariffs World and higher prices imposed on a number of Asian business partners, economists say it is likely that one of the main engines in the Los Angeles region’s economy – trade – will be hard.
Prices include additional tasks of 24% on Japan and 25% on South Korea. On Wednesday, the president increased his tax rate on Chinese imports to 125%.
Canada and Mexico have been excluded from the basic line and additional rates, which could reduce the effects of the grocery store. Most American imports come from Mexico and Canada, including lawyers, cucumbers and mushrooms. But countries are still faced with 25% samples from certain goods and 25% prices on cars and light trucks.
The prices would result in a drop in imports of just over $ 800 billion in 2025, or 25%, said the Tax Foundation.
Although only the goods trade is directly affected by the prices, the indirect effects would be largely going, said analysts. One of the many industries that should be affected by prices is real estate.
South California is the fourth industrial real estate market in the world, after all of the United States, China and Japan, said Laura Clark, chief of the Rexford Industrial Realty Inc.
The Los Angeles Real Estate Investment Trust has and operates 425 industrial properties in southern California with a total of more than 50 million square feet. Its tenants include companies in wholesale, manufacturing, storage and transport, retail and construction.
“Macroeconomic uncertainty is probably the biggest challenge that the tenants” are confronted, “she said. “This is a very fluid period on the market and the news feels like constantly changing.”
The uncertainty concerning the cost of business could lead the tenants to delay decision -making regarding extensions or commercial training in the near future.
“It's just too early to see how tenants react and how their decision -making will change,” said Clark.
Fortunately for owners, unpredictability comes at a time when the region's industrial real estate market experienced a collection of tenants' demand from last year, she said, with the demand for industrial buildings in a wide variety of sectors, including aerospace vehicles, electric vehicles, defense, manufacturing and the first mile of consumer goods.
“We have also experienced strong growth in construction professions,” she said, focusing on the construction of more housing in southern California and the beginnings of increased space demand to serve the reconstruction of structures destroyed in January fires.
The completion of new industrial properties in southern California took place at 10 years in 2024, according to a recent JLL real estate brokerage report. This led to a drop in vacancy and an increase in rents, “prepare the ground for the next cyclic resumption”.
But forecasts for economic growth, JLL said: “are unable to capture the volatile and unpredictable political environment under President Trump” because “the time scale on which the prices can change and will therefore affect the economy is subject to a political whim”.
“The impact on global growth and growth in many economies are certainly negative,” says the report, “but we cannot assess the magnitude.”
Companies slow down their orders for imported products in the form of prices and uncertainty, said David Fan, principal director of JLL's research for southern California. “Customers take longer to decide” if they want to make wholesale purchases.
Wholesalers will pass at least some of the additional costs to their customers, he said: “But that eats a little in their margins.”
Consumer expenses in terms of retail are “always solid,” said Fan. However, “it would not be surprising that people have less discretionary money to spend … if everything we have to pay is going to be more expensive.”
Prices can be positive in the long term for the industrial properties sector if they are moving towards administration objectives to increase the manufacture of reshoration in the United States, Real Estateur Commercial said. “In the short term, pricing uncertainty will result in delayed rental decisions” by tenants.
