Q1 2023 Office Market Outlook – Ventura County
Ventura County’s office market is recovering from the pandemic shutdown. Tenant demand weakened slightly, but rents remained stable. However, vacant office space increased by 135,848 square feet, pushing the vacancy rate to 12.7%. Leasing volume increased in some areas, but overall recovery is slower. Sublease space decreased in the East but increased in the West. Average asking rent remained steady at $2.52 per square foot.
Trends to Watch
Ventura County’s office leasing is influenced by future employment growth and interest rate changes. Recent Federal Reserve rate hikes have led to a decline in office sales volume. The county’s unemployment rate was 3.6% in April 2023, with job losses in the professional and business services sector. Job growth challenges persist due to limited labor force growth and lack of new business formation. Landlords may offer concessions, but rising interest rates and uncertainties about post-pandemic work environments may delay transactions. Work-from-home trends impact office space demand, causing lower occupancy and cash flow challenges. Both landlords and tenants will face difficulties, affecting real estate values.