Third Quarter
Ventura County Offices Gain Momentum in Q3 2025
Positive net absorption, declining vacancy, and rising rents signal that the market is gradually recovering across East and West Ventura County.
Q3 activity generated 169,016 SF of positive net absorption, led by the East submarket as leasing outpaces new vacancies.
MARKET OVERVIEW
The Ventura County office market showed significant positive momentum during the third quarter of 2025, moving toward stabilization after a challenging first half of the year. Q3 activity generated 169,016 square feet of positive net absorption, a dramatic reversal from the negative trend in the previous quarter. This performance improved the year-to-date total to negative 57,273 square feet, marking a substantial recovery though not yet enough to push the figure into positive territory.
This surge in occupancy drove the overall vacancy rate down 60 basis points quarter over quarter to 11.8%, a 30-basis-point improvement year over year. The market currently has 3.47 million square feet of vacant office space, a 4.6% decrease from the previous quarter.
A key headwind to recovery remains vacant sublease space, which declined 6.5% quarter over quarter to 434,264 square feet, remaining 11.1% lower year over year. On a direct basis, office vacancy showed notable improvement, falling from 10.8% to 10.3% quarter over quarter— a clear sign that leasing activity is successfully outpacing newly vacated space.
On the construction side, no new office projects were completed during the quarter, keeping year-to-date completions at zero square feet. Developers continue to exercise caution, focusing on build-to-suit and pre-leased projects rather than speculative construction, as the vacancy rate has remained in double digits for eight consecutive years.
Leasing activity totaled 231,452 square feet during Q3, down 31.4% from the prior quarter. However, year-to-date leasing reached 911,613 square feet, reflecting a stable 0.3% increase from the same period last year. The average asking rent across the county edged up to $2.59 per square foot full-service gross, a 2.0% quarterly and 5.7% annual increase as landlord confidence strengthened.
Office sales volume fell sharply in Q3 to 391,728 square feet, down 31.0% from the prior quarter. Despite this slowdown, year-to-date sales volume remains strong at 1,452,271 square feet, up 53.8% year over year. The year-to-date sales dollar volume reached $283.4 million, a robust 156.1% annual increase.
The average building size sold in Q3 was 18,654 square feet, a 40.5% decline from last year, reflecting demand for smaller, value-add assets. The average sale price fell to $118 per square foot, down 5.1% quarter over quarter and 14.5% year over year, indicating that investors remain highly selective, prioritizing smaller, lower-risk, value-oriented opportunities.
TRENDS TO WATCH
As market conditions evolve, tenants are responding to value. Both East and West County recorded occupancy gains, with the East outperforming on a year-to-date basis.
The East submarket posted 111,901 square feet of positive net absorption, recovering much of the space lost in the first half of the year. Rents in the East rose 2.3% quarter over quarter and 6.9% year over year, signaling that improved demand is beginning to fuel rent growth.
Similarly, the West submarket achieved 92,314 square feet of leasing volume, up 17.1% quarter over quarter, pushing year-to-date volume 10.7% higher than last year. Direct vacancy rates improved in both submarkets, falling to 11.6% in the East and 8.4% in the West, further evidence that leasing activity is outpacing newly vacated supply.
The key to sustaining this momentum lies in employment growth. Ventura County’s unemployment rate rose throughout 2025, reaching 5.2%, as office-occupying sectors continued to underperform. Due to the federal government shutdown, September employment data is unavailable; however, August figures show Financial Activities lost 300 jobs, Real Estate and Rental and Leasing declined by 100, Professional and Business Services shed 400, and the Information sector — which includes many tech positions — fell by 100. Overall, core office-demand sectors contracted by 900 jobs year over year.
The next quarter will be crucial: if net absorption remains positive, it will confirm that the market has stabilized and entered a recovery phase.
Investment activity remains constrained as higher interest rates and tighter underwriting continue to limit transaction volume for office properties. However, the large year-to-date sales volume ($283.4 million, up 156.1% Y/Y) demonstrates that significant capital has been deployed across the market, signaling confidence despite broader uncertainties.
Looking ahead, the Ventura County office market is expected to maintain measured stability and gradual recovery through the end of 2025. The combination of positive absorption, declining vacancy, and steady rent growth indicates the market is recalibrating toward equilibrium after several years of post-pandemic adjustment.
