What once looked like the edge of the map of Los Angeles County could become its next big industrial frontier. And that, officials say, could reshape Southern California's warehouse market.
In Palmdale, a relatively quiet city in the Antelope Valley that sits about 55 miles north of downtown Los Angeles, Covington Group is developing a master-planned project. It could add to America's most populous county more than 9 million square feet of industrial property across 510 acres. In terms of scale, that's like putting three of the NFL's biggest venue, SoFi Stadium, on land about the size of the country of Monaco.
The developer secured approvals in the past month for 8 million square feet of industrial space — adding to prior permissions for an adjacent 1.4 million-square-foot project. All told, the approvals for Antelope Valley Commerce Center are among the largest industrial entitlements ever completed in Los Angeles County.
The planned $1.2 billion real estate development could change property sales dynamics, according to Dana Whitmer, Covington’s chief development officer, because land for large-scale industrial development has grown scarce and expensive closer to the core of Los Angeles.
As a result, developers and occupiers are willing to look farther afield for lower costs, available labor and room to grow, even as the broader Los Angeles industrial market shows early signs of stabilizing with more tenant move-ins than move-outs in the first quarter, according to CoStar data.
“This is the next stop,” Whitmer told CoStar News. He describes Palmdale as a practical alternative to more established industrial markets such as Santa Clarita and parts of the Inland Empire.
Covington's expansion comes at a time when national industrial property development is tapering off a multiyear boom that has left many markets across the country oversupplied, according to CoStar data. Construction starts peaked in 2022 and have since dropped to 10-year lows at a time of slower demand and tougher financing.
The Palmdale project has yet to break ground and faces potential headwinds in the form of those financing challenges, high construction costs and delays. It could also serve as a test for tenant demand in less traditional industrial pockets.
Industrial projects pushed to fringes
The Palmdale project is arriving in a Los Angeles market where less than 5% of industrial space has been built in the past decade, construction has slowed sharply, and large-format logistics facilities are increasingly pushed to fringe submarkets as infill sites near the ports grow scarcer.
City officials say Palmdale now has 300,000 people, more than 13 million square feet of industrial space in development and is within 90 miles of LAX and the ports of Los Angeles and Long Beach, making it more of an inland extension of the region’s logistics network than a remote outpost.
The project’s appeal, Whitmer said, is not just that it sits off Highway 14 near Palmdale Regional Airport and within reach of possible rail service. It is also that Antelope Valley has the kind of labor pool many industrial employers want but often struggle to reach.
Palmdale and the broader Antelope Valley have long functioned as bedroom communities, with a number of residents commuting out for work each day. Census data shows Palmdale workers average a nearly 40-minute trip to work.
Whitmer said that reality helped convince city leaders to support a large industrial project that could bring jobs closer to home.
“The city is truly a partner of ours,” Whitmer said. “They want to see development, they want to bring jobs to their community and they want industrial.”
That political alignment stands out in California, where industrial development has run into growing resistance in some communities over truck traffic, air quality and land use concerns.
Whitmer said Palmdale’s leaders took a different view because of how many local residents already endure long drives to warehouse, logistics and manufacturing jobs elsewhere.
Whitmer said the local workforce includes not only traditional industrial labor, but also skilled employees tied to the area’s aerospace and defense base. The city of Palmdale highlights Plant 42 — a classified aircraft manufacturing plant owned by the U.S. Air Force — and major employers including Lockheed Martin, Northrop Grumman and Boeing as part of a local ecosystem built to attract suppliers and other expansion users.
That mix, he said, gives the project a broader range of potential users than a typical outlying logistics site.
Leasing prospects
Whitmer said the Antelope Valley Commerce Center project is aimed at users that need big footprints and flexibility, whether that means bulk warehouse space, fulfillment centers, advanced manufacturing or defense-related operations.
Plans and zoning allow for a wide range of building types, including the possibility of a single structure spanning as much as 2 million square feet. That kind of flexibility matters in a market where large blocks of land in Los Angeles County are hard to find and even harder to entitle, he said.
Covington structured the approvals to cover a broad spectrum of industrial uses so future tenants will not have to wait through another full public review process.
The Antelope Valley Commerce Center is slated to be built in phases over the next five to 10 years, probably starting with a user seeking more than 1 million square feet. The timeline could shift if a major occupier steps in early and takes a large share of the site, Whitmer said.
Whitmer said early interest has come from a mix of logistics, manufacturing and specialty industrial users that need large, contiguous blocks of space that are increasingly difficult to find elsewhere in Los Angeles County.
An international tire company, for example, has already explored the site as part of a potential expansion strategy tied to distribution and light assembly operations, while a global automotive importer has also toured the property, looking at Palmdale as a location to receive vehicles from the ports and complete final modifications before sending them to dealerships.
He added that interest has also come from defense-related companies drawn to the site’s proximity to aerospace employers and the potential for access to Palmdale Regional Airport.
While none of those discussions have resulted in signed deals yet, Whitmer said they signal the kind of large-scale, user-driven projects that could anchor the first phase of development.
"You could put a 2 million square feet under one roof which is kind of unheard of," Whitmer said. "But there's actually those requirements out there. Burlington Coat Factory, for instance, is taking a 2 million square-foot-building in Phoenix right now."