The Dedeaux name is deeply rooted in Southern California's industrial real estate sector – and in baseball. The family business dates back to legendary University of Southern California baseball coach Rod Dedeaux. He led the Trojans to 11 national championships and coached US Olympic teams, after founding the transport company Dart in 1938, which eventually developed into a nationwide logistics firm.
Dart initially acquired industrial properties for its own use and then began leasing space to clients. This evolved into Dedeaux Properties, now based in Los Angeles, which develops and invests in logistics and distribution facilities, as well as specialised industrial outdoor storage (IOS) sites. CEO Brett Dedeaux is navigating the business through a considerably more complex market. After years of rapid demand, Southern California is now recovering from a period of elevated vacancies and tariff uncertainties.
Dedeaux observed that tenants have continued their expansion plans, while investors are returning to the market. He discussed where this recovery is manifesting, why advanced manufacturing and IOS are outperforming, and how rising power demand is changing the types of buildings his company develops. Earlier in the year, Dedeaux predicted that 2026 would mark a transition from a 'reset to a recovery' for the industrial sector.
Institutional capital partners, who possess a comprehensive perspective due to their extensive industrial portfolios in Southern California, speak of the market 'moving along the bottom'. A significant pause arose after the 'Liberation Day' policy, as tenants faced questions regarding its impact on their operations and investment decisions. This included considering whether to proceed with major investments in infrastructure improvements, capital expenditures, or hiring hundreds of employees. A massive change in tariff policy, followed by global conflicts and interest rate hikes, caused significant uncertainty.
Nevertheless, green shoots are visible. Clients who were previously hesitant to lease properties are now re-evaluating options and engaging in discussions. While the economic competitiveness of offers may not yet have reached previous levels, in certain locations, such as the Inland Empire West, there are once again three offers for previously hard-to-lease properties. This suggests that excess inventory is being absorbed before rents, particularly in the Inland Empire East, can rise again.
A significant difference in the current recovery is the growth of advanced manufacturing, with companies like Anduril occupying substantial space in Southern California. The region remains a strategic location for the aerospace sector due to its skilled workforce, existing suppliers, and service providers. This is leading to an increasing scarcity of Class A space in some infill areas of L.A., enabling rapid rent increases there, given the limited supply.
Capital partners and equity groups, who had long been on the sidelines, are now returning to the market. Although there is no oversupply of capital, many recognise the momentum and confidence in Southern California's strength and are beginning to invest again. This is reflected in an increase in capital market transactions, lease signings, and the reactivation of companies with significant capital reserves.
