Aerospace and defense leasing in Los Angeles County has nearly quintupled its share of big-box industrial activity since 2025, according to the Los Angeles Business Journal’s Real Estate Quarterly report, with brokers pointing to a sustained boom in the South Bay submarket.
The LABJ report highlights how defense contractors, aerospace manufacturers, and related suppliers are absorbing large-format industrial space across the South Bay, driven by Pentagon spending increases and the expansion of space exploration companies operating in the region.
The South Bay — encompassing cities like El Segundo, Hawthorne, Torrance, and Long Beach — has long been a center for aerospace engineering and manufacturing. The area’s proximity to Los Angeles International Airport, the Port of Long Beach, and a deep talent pool from institutions like Caltech and UCLA has made it attractive for companies requiring large industrial footprints with specialized infrastructure.
Brokers report that available big-box industrial space (buildings over 50,000 square feet) has tightened considerably, with vacancy rates dropping to historically low levels. The surge in aerospace and defense demand is crowding out other industrial users, including traditional logistics and distribution tenants who have been the primary drivers of LA County industrial real estate in recent years.
The leasing boom also reflects the broader national security buildout, with increased DOD appropriations flowing to Southern California contractors. Companies like SpaceX, Lockheed Martin, Northrop Grumman, and a growing ecosystem of startups are competing for space and talent in what has become one of the tightest industrial markets in the country.
For the local economy, the aerospace resurgence brings high-wage engineering and manufacturing jobs but also intensifies pressure on an already constrained housing market, as workers compete for limited residential supply near employment centers.
