Commercial Real Estate Updates
Is Now the Right Time to Sell Your South Bay Commercial Property?
By Deborah Naumovski & Gulshen Kaur of DnG Commercial Real Estate
Commercial Real Estate Agents, Los Angeles & South Bay
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South Bay, LA: El Segundo – Torrance – Inglewood – Hawthorne – Gardena
Greater Los Angeles: Santa Monica – Culver City – Marina Del Rey
If you own commercial property in the South Bay, there's a good chance you've been asking yourself this question. Maybe quietly, maybe out loud. The headlines are noisy. Tariffs, inflation, California's population shifts, interest rates that won't seem to budge. It's a lot to sort through.
So let's sort through it together. If you're thinking about selling your South Bay commercial property, here's what the data actually says, and what it means for you.
6-minute read
Quick Take: What You Need to Know
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Market Signal: LA County industrial vacancy has normalized to 4.6%, with net absorption turning positive for the first time since 2022, a stabilizing market that still favors well-positioned sellers.
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Economic Foundation: The U.S. economy grew 2.2% in 2025, decelerating but not collapsing, and institutional buyers remain active in the South Bay market.
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Rising Headwinds: California’s population decline, softening job growth, and persistent inflation suggest this selling window may be narrowing.
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The "Sell" Decision: For many, now is a smart time to sell South Bay commercial property, especially if you have stable tenants and a well-maintained asset.
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The Bottom Line: You can't make a good decision without an honest, current valuation of your specific property. And that’s what we’re here for.
The South Bay Commercial Property Market Right Now: Stabilizing, Not Spectacular
The South Bay commercial real estate market is in a place that doesn't make dramatic headlines, but is actually quite meaningful for anyone looking to sell South Bay commercial property: it's stabilizing.
Los Angeles County's industrial vacancy rate sits at 4.6%, according to Cushman & Wakefield's Q4 2025 SoCal CRE Report, which is the highest level recorded in the past decade, reflecting a market that has normalized after years of near-zero availability. Industrial rents, while softening slightly, remain roughly 48% higher than pre-pandemic levels. Importantly, net absorption turned positive on an annual basis for the first time since 2022, a meaningful signal that occupier demand is stabilizing.
In the South Bay specifically, Torrance, El Segundo, Carson, Gardena, Manhattan Beach, industrial assets continue to outperform nearly every other sector in the region. Demand from e-commerce fulfillment, last-mile logistics, aerospace and defense, and port-related activity remains strong. Occupied properties are commanding a meaningful premium over vacant ones. That matters when you're deciding whether to sell your South Bay commercial property now or wait.
On the office side, the picture is more nuanced. LA County's overall office vacancy is elevated at 23.4%, but the South Bay benefits from its proximity to LAX, a strong aerospace and tech cluster, and competitive rents compared to West LA. Coastal submarkets like El Segundo and Manhattan Beach continue to outperform traditional inland markets.
The bottom line: this is not a booming market, and it's not a crashing one. It's a window, and windows don't stay open forever. For owners considering selling South Bay commercial property, that distinction matters.
The Economic Picture: What's Working in Your Favor
Despite the noise, the underlying U.S. economy is holding up better than the headlines suggest, and that's good news if you're looking to sell South Bay commercial property.
The real measure of economic health, what economists call "real final sales to private domestic purchasers," which strips out the distortions of trade, inventories and government spending, grew at a solid 2.7% average rate throughout 2025, according to CoStar's economic analysis. Consumer spending rose 2.4% in Q4 2025. Fixed investment is growing, particularly in AI and technology infrastructure, which is driving demand for commercial space across the South Bay.
Looking ahead, Oxford Economics is projecting GDP growth of approximately 2.0% in 2026, modest but steady. Institutional buyers are still active and still chasing quality assets. The buyer pool for South Bay commercial property is real and it exists right now.
That's the good news. And it's genuinely good news.
The Honest Headwinds: Because You Deserve the Full Picture
Here's where we're going to be straight with you, because that's how we operate. Before you decide to sell your South Bay commercial property, or hold it, you need to see the full picture.
There are real reasons to pay attention to timing.
The consumer is showing strain. The U.S. savings rate has fallen for eight consecutive months and now sits at just 3.6%, its lowest level since October 2022. American consumers have been spending faster than they've been earning for 18 of the last 19 months. That's not sustainable indefinitely, and when it corrects, it affects tenant demand across South Bay commercial properties.
The job market is softening. The U.S. added an average of only 15,000 jobs per month in 2025, a significant slowdown. January 2026 saw 108,435 layoff announcements, the highest for any January since 2009. Credit card delinquency rates climbed throughout 2024 and into 2025, reaching levels not seen since the Great Financial Crisis before beginning to flatten, a warning sign for tenant financial stability particularly among smaller and mid-market businesses. These are not recession numbers, but they are caution flags.
California is facing structural headwinds. California added only 5,500 jobs in the May through July 2025 period, an annualized rate of just 0.2%, well below the national pace. More than 229,000 people left California for other states in the past year, while immigration into California fell 65%. The state population has grown at an anemic pace since 2019, with domestic out-migration consistently offsetting gains from international immigration.
Interest rates aren't dropping fast. Core PCE inflation ran at 3% at the end of 2025, above the Fed's 2% target. The Federal Reserve is in wait-and-see mode. Meaningful rate cuts that would compress cap rates and push South Bay commercial property values higher are not on the near-term horizon.
Trade headwinds are real. Tariff uncertainty is already stalling over a third of California commercial real estate projects, according to the Allen Matkins/UCLA Anderson Forecast survey, and South Bay industrial tenants with import-dependent or cross-border supply chains face direct cost pressure. That uncertainty affects leasing decisions, lease renewals, and how aggressively buyers will underwrite future cash flows.
None of this means the sky is falling. But it does mean the window for selling South Bay commercial property into a stabilizing, active market may be narrower than it looks.
So, Should You Sell Your South Bay Commercial Property?
Honestly? For many owners, yes. Now is a smart time to at least have the conversation about selling your South Bay commercial property.
But it depends on three things:
1. Your hold strategy. If you're a long-term holder with a 10+ year horizon and strong conviction in the South Bay's fundamentals, staying put may make sense. The South Bay's aerospace, defense, and port-driven economy provides a degree of insulation from broader California trends that other markets don't have.
2. Your tenant situation. A strong, stable tenant with years left on their lease is one of the most valuable things you can bring to a sale. CoStar data confirms that occupied South Bay commercial properties are commanding a significant premium over vacant ones right now. If your tenants are solid, your timing is good.
3. Your property condition. Selling South Bay commercial property into current stability beats selling into a softening market after deferred maintenance has caught up with you. If your property needs work, the calculus changes.
The case for selling now is straightforward: the market is stabilizing, absorption is turning positive, buyers are active, California's structural headwinds are building, and with GDP growth projected at only around 2% in 2026, rate cuts probably aren't coming fast enough to meaningfully lift valuations.
The case for waiting is also real: if you have strong long-term tenants, a genuine long-term hold strategy, and planned improvements that will increase value, patience may serve you better.
The key is knowing which situation you're actually in, and that requires an honest conversation with someone who knows this market cold.
Frequently asked questions
What Smart South Bay Commercial Property Owners Are Doing Right Now
They're not panicking. They're not sitting still either.
The smartest investors we're talking to right now are doing one thing above all else: getting informed. They're finding out what their South Bay commercial property is actually worth in today's market, not what it was worth in 2022, not what they hope it might be worth in 2028. Today.
Because here's the thing: you can't make a good decision without good information. And a current, honest valuation costs you nothing but a conversation.
Let's Talk
It all starts with a conversation. We'll tell you what your property is worth today, who the likely buyers are, and whether now is the right time for you specifically. No obligation, no pressure.
Deborah and Gulshen have spent nearly 20 years in this market. They know South Bay commercial property inside and out, they know the numbers, and they'll give you a straight answer, not a sales pitch.
Call DnG today: (310) 999-1203