Q4 2022 Industrial Market Outlook – Ventura County
MARKET OVERVIEW
Ventura County’s industrial market loosened up in the fourth quarter of 2022, as vacant space saw a 44.1 percent increase from Q4 2021. While the vacancy rate increased 30 basis points from last year it remained at an extremely low 1.3 percent. The average asking rent increased 8.2 percent year over year to $0.92 per square foot triple net. Since 2020, there has been limited construction added to the supply of industrial space. As the economy picked up post-pandemic demand for warehouse-distribution space depleted the existing inventory, sending rent soaring. With record low vacancy, sparse development began to crop up in the region as 2,172,180 square feet of completed construction was added to the inventory year over year. Amazon’s fulfillment center in Oxnard represented about 70 percent of the newly completed construction. The additional 30 percent of completed construction was also leased.
TRENDS TO WATCH
The absence of speculative construction in the market will continue to hold up rent and sale prices. Businesses looking for large state of the art facilities in Ventura County will need to pursue built to suit opportunities. Development has not kept up with rising demand for warehouse-distribution space. Year to date Central Ventura County experienced a 62.7 percent drop in leasing volume from 2021 as the vacancy rate registered a low 1.7 percent as of Q4. North Ventura County leasing volume dropped off 49.3 percent with an extremely low 0.7 percent vacancy rate. The same happened in the West region with a 15.4 percent year over year decrease in leasing volume and a vacancy rate of 1.4 percent. Overall, in the fourth quarter of 2022, Ventura County experienced a 42.1 percent drop in leasing volume from 2021. As developers continue to observe the pressure of pent-up demand depleting industrial space and bidding up pricing, they’ll be motivated move forward with speculative construction and redevelopment opportunities.
