Q2 2023 Office Market Outlook – Ventura County

Market Overview

During 2Q 2023, the office market in Ventura County saw a slight increase in vacancies, with vacant
space increasing by just 0.2% quarter-over-quarter, compared to a higher 6.7% year-over-year rise.
The total vacant space reached 3.6 million square feet, influenced by remote work and the return to the
office struggles. Despite the deceleration in overall office vacancies, the growth rate of available sublease
space suggests that the office market is still affected by the pandemic fallout. Quarterly, there was an
8.7% increase, and annually, a 23.9% increase in available sublease space, totaling 810,345 square
feet, surpassing the peak observed during the Great Recession.

Trends to Watch 

The future growth in employment in office-occupying sectors and potential changes in interest rates are
expected to drive office leasing. In July, the Federal Reserve increased interest rates to a 22-year high,
leading to a significant 74% year-over-year decline in office sales volume and a 30.2% decrease in the
average sale price. The office market conditions, and demand are anticipated to continue evolving. In
June, the unemployment rate in Ventura County rose to 4.2%, higher than the previous month and the
previous year. The largest office-occupying sector, professional and business services, remained flat
compared to last year. The overall recovery of the office market will depend on the speed of employment
recovery. However, Ventura County faces challenges in job growth due to the lack of labor force growth
and the absence of new business formation or organic business expansion.