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Rents for small industrial spaces hit affordability ceiling in the most expensive US markets

Record increases, reached mid-pandemic, test limits of what smaller tenants can afford
Rents for small industrial spaces in Los Angeles have more than doubled in the past 10 years, but their rate of increase has slowed significantly since early 2023. (Yutsai Wang/CoStar)
Rents for small industrial spaces in Los Angeles have more than doubled in the past 10 years, but their rate of increase has slowed significantly since early 2023. (Yutsai Wang/CoStar)
CoStar Analytics
February 25, 2025 | 3:35 P.M.

Small bay industrial properties have been a standout category of commercial real estate in recent years. A dearth of new development has kept vacancy rates for these smaller properties tight during 2023 and 2024, even with increases among other categories of commercial real estate favored by investors, such as bulk logistics facilities and apartments.

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