What to Know Before Selling a Warehouse or Industrial Property in Los Angeles

Selling a warehouse or industrial property in Los Angeles is nothing like selling an office building or retail space. The buyers are different, the valuations are different, and even the inspections can be more complex. With industrial space in high demand across Southern California, owners often underestimate how much strategy goes into selling right — and how many small details can make or break the deal.

Whether you own a single-unit warehouse in Van Nuys or a multi-tenant property near Downtown Los Angeles, here’s what you need to know before putting it on the market.

1. Start With Zoning and Use Verification

The first step is to confirm what the property is legally zoned for. Los Angeles has multiple industrial zones — M1 (Limited Industrial), M2 (Light Manufacturing), and M3 (Heavy Industrial) — each allowing different levels of manufacturing, storage, and processing.

Many older properties have been modified or repurposed over the years, so what’s happening there today might not match the official zoning. If the current tenant is using it for automotive, distribution, or fabrication, double-check that the use is compliant.

Buyers and their lenders will always verify this during due diligence, so resolving it early prevents deals from falling apart later. You can confirm zoning through the City’s ZIMAS system or a zoning report from a title company.

2. Clean Up Environmental and Compliance Issues

No matter how solid the location, environmental red flags can kill a deal. Before listing, it’s smart to order a Phase I Environmental Site Assessment — a standard inspection that identifies potential contamination from current or past uses.

Auto shops, metal works, paint facilities, and storage yards are common triggers for deeper testing. If a Phase I identifies risk, a Phase II (soil or groundwater testing) may be needed. Sellers who handle this proactively build credibility with buyers and avoid price reductions during escrow.

Also confirm compliance with fire department regulations, hazardous materials storage, and stormwater runoff. These aren’t just technicalities — they directly impact property value and insurability.

3. Understand What’s Driving Your Value

Unlike residential properties, warehouses are primarily valued based on income (if leased) or utility and location (if vacant).

Appraisers and buyers typically look at:

• Location: Proximity to major freeways, ports, or industrial corridors like Vernon, Commerce, or the San Fernando Valley.

• Size and Layout: Clear height, loading docks, drive-in access, and yard space all affect pricing.

• Condition: Roof age, electrical capacity, sprinkler systems, and HVAC setup.

• Lease Terms (if occupied): Length of lease, tenant credit, rent amount, and escalation clauses.

  
  

A well-located, high-clear warehouse with modern systems can command a premium, even if it’s smaller than competing properties.

4. Gather Your Documents Before Listing

Serious buyers will ask for everything — so being organized from the start makes the sale smoother and faster.

Collect:

• Lease agreements and rent rolls

• Building plans and permits

• Environmental reports

• Utility bills

• Maintenance records

• Any recent upgrades or capital improvements

  
  

Buyers appreciate transparency. Having clean documentation signals that the property has been well-managed, which can add confidence — and value — to your deal.

5. Decide Whether to Sell Vacant or Tenant-Occupied

This choice can drastically change your buyer pool and your price.

If your warehouse is tenant-occupied, investors often prefer to buy it as-is, with rent and cash flow in place. A strong tenant with a long-term lease is an asset — especially if they handle their own maintenance or pay NNN (triple net) expenses.

If your tenant’s lease is short-term or month-to-month, the property might appeal more to owner-users who want to occupy it themselves. In those cases, giving notice and delivering the space vacant can increase marketability — especially for smaller buildings under 10,000 square feet.

Just make sure you’re following the terms of the lease and local laws if you plan to end a tenancy before selling.

6. Pricing Strategy: Don’t Just Rely on the “Per Foot” Number

Warehouse pricing is often quoted in price per square foot, but that’s only part of the story.A property in Boyle Heights might sell for $400 per square foot, while one in Gardena might trade closer to $300 — and both could be fair.

Beyond location, other pricing factors include:

• Power supply (amperage can make a big difference)

• Clear height (16' vs 24' ceilings can change your buyer base)

• Loading (grade-level doors vs dock-high loading)

• Yard space and truck access

• Parking availability

  
  

If the property includes extra land or yard area, calculate value per usable square foot, not just building size.

A good broker will compare your property to both recent sales and active listings, giving you a realistic range that fits the current market — not inflated online estimates.

7. Marketing to the Right Buyers

Marketing an industrial property isn’t about glossy flyers or open houses. It’s about reaching the right audience — investors, owner-users, and developers — and presenting the information they care about most.

That means:

• A clear data sheet with zoning, ceiling height, loading type, power, and lot size.

• Professional photography showing truck access, parking, and interior layout.

• Targeted exposure on commercial platforms (LoopNet, Crexi, CoStar) and direct broker networks.

  
  

Industrial buyers are data-driven. The more details you provide upfront, the more serious your inquiries will be.

8. Plan for a Longer Escrow — and Possible Delays

Industrial transactions can take longer than residential or retail deals. Environmental reviews, tenant estoppels, financing approvals, and inspections all take time.

It’s smart to budget for a 60- to 90-day escrow, and sometimes longer if the buyer needs lender approval or additional testing. Stay flexible and proactive — keeping communication open with the buyer’s agent, lender, and escrow officer helps avoid unnecessary delays.

9. Working With an Agent Who Understands Industrial Sales

Industrial properties are a different language — from the lease structure to the loading docks. Many agents who specialize in office or retail don’t understand how to market and value warehouses effectively.

An experienced industrial broker knows:

• How to navigate environmental disclosures

• Which buyers are active in your area

• How to price based on zoning and future potential

• How to structure deals around tenant lease timelines

  
  

Having someone who speaks that language means fewer surprises, smoother negotiations, and a faster close.

Selling an industrial property in Los Angeles takes preparation, accuracy, and a clear understanding of who your buyer is. With the right planning and guidance, you can turn a complex process into a well-executed transaction that delivers strong results — whether your goal is reinvestment, exchange, or simply cashing out after years of ownership.