Market Insight
Aerospace and defense are bringing new contracts, major facilities, and high-skilled jobs to Southern California, creating fresh momentum for communities near the region's growing employment hubs.
The Shift
Los Angeles County companies received $15 billion in defense contracts in 2025. Adjusted for inflation, that total was more than double the level a decade earlier, while the overall U.S. defense budget grew about 19% over the same period.
The growth now extends well beyond established contractors. Space, drone, satellite, autonomous-system, and defense-technology companies are expanding around El Segundo, Hawthorne, Long Beach, Huntington Beach, Irvine, Santa Clarita, and the Antelope Valley.
A new generation of aerospace companies could become one of Southern California's most important sources of high-wage employment, business formation, and real estate demand.
Why It Matters
CBRE counted 45,200 workers in Los Angeles County aerospace product and parts manufacturing at the end of 2024. Employment had risen 3.4% over five years and 9.2% over ten years. The county also received $315 million in direct DARPA funding in fiscal 2024, more than any other U.S. county and 16% of the national total.
Physical expansion is following. Anduril plans a $1 billion, 1.2-million-square-foot Long Beach campus expected to open in 2027. Rocket Lab has based its U.S. headquarters in Long Beach, while El Segundo and Hawthorne continue to support dense networks of engineers, suppliers, manufacturers, and startups.
Those investments can strengthen demand for industrial, research, and office space first. Sustained hiring can also bring new renters and buyers who value proximity to these job centers, supporting nearby housing and neighborhood businesses over time.
For Buyers
A home with a practical commute to El Segundo, Hawthorne, Long Beach, or another expanding hub may benefit from a growing pool of well-paid workers who want to live near their jobs.
For Sellers
Proximity to aerospace employers, freeway access, transit, flexible work space, and nearby services may become increasingly valuable to incoming engineers, technical workers, and their households.
For Investors
New facilities can support apartments, industrial buildings, research space, and neighborhood retail. Hiring, move-ins, leasing, and construction near each cluster will show where that demand is taking hold.
What To Watch
Not every contract dollar becomes a local job, and the benefits will not arrive evenly across the region. The most useful indicators will be completed facilities, sustained hiring, new leases, household formation, and housing absorption near the major employment clusters.
The direction is encouraging: aerospace and defense are becoming a more important source of capital investment and well-paid employment in several Southern California submarkets. If that momentum continues, the South Bay and Long Beach are the most logical places to see the real estate effects first.
The Takeaway
Southern California's aerospace expansion offers something the region needs: investment in physical facilities, advanced manufacturing, and well-paid jobs. That combination can support commercial space, housing demand, and neighborhood growth around the companies doing the work.
Source note: this page is original commentary based on reporting and data from the Southern California Association of Governments, CalMatters and The Markup, CBRE, and the State of California. Contract, employment, and investment figures use different definitions and reporting periods. Information is subject to errors and omissions; readers should independently verify financial, legal, tax, construction, employment, and property-specific details with appropriate professionals.
Review the SCAG regional report Review the defense-contract analysis Review the CBRE aerospace report Review California's space-economy updateLocal Guidance
LA Creative Realty can help identify where new employment and investment may create a durable location advantage.