Fourth Quarter 2025
Ventura County Office Market Adjusts as Investment Rebounds and Sublease Space Abounds
While sales volume surged, leasing activity remained focused on renewals as vacancy rose in late 2025.
Investors targeted income-producing assets, even as tenants retained market leverage.
MARKET OVERVIEW
The Ventura County office market’s recovery continued in 2025, though challenges persist in lifting occupancy. Landlords and sublessors, responding to weak demand and elevated vacancy, adjusted asking rents, though the strategy has been slow to generate meaningful leasing momentum. Vacant office inventory increased by 262,642 square feet compared with 2024, indicating continued softening, with occupancy declining since the third quarter.
Year over year, direct vacant office space rose approximately 3.7%, while sublease availability surged 40.0%, underscoring the slow progress toward pre-pandemic occupancy levels. Sublease asking rents fell 9.6% from last year to $1.97 per square foot full service. Meanwhile, newer direct space delivered in East Ventura pushed the countywide average asking rent to $2.71 per square foot, further enhancing the relative value of sublease options.
Vacancy trended upward in the latter half of 2025, with the overall rate increasing 80 basis points from Q3 to 12.6%, up 90 basis points year over year. This shift reflects evolving workplace strategies and continued space optimization. Leasing activity, however, has been driven primarily by renewals. Year-to-date leasing volume rose 20.3% compared with the same period last year to approximately 1.4 million square feet and increased 20.8% from the prior quarter.
Since Q4 2020, direct vacant office space has declined by roughly 197,000 square feet. Over the same period, sublease space increased by about 316,000 square feet, fluctuating quarter to quarter as tenants pursue discounted, flexible options from motivated sublessors. Despite this churn, a sustained contraction in sublease availability has yet to materialize.
TRENDS TO WATCH
Ventura County’s office market is entering 2026 with sublease availability shaping tenant strategy and investment activity signaling ongoing recalibration. Tenants seeking value will continue to find opportunities in buildings with vacant sublease space, where competitive pricing and longer remaining lease terms create cost advantages compared with direct space.
Subleasing remained active in 2025, though momentum moderated late in the year. Tenants subleased 8,593 square feet in Q4, bringing the year-to-date total to approximately 76,000 square feet, an 18.3% increase compared with the same period in 2024. At the same time, available sublease inventory expanded 11.8% quarter over quarter and 30.9% year over year to more than 580,000 square feet. While elevated inventory reflects tenants continuing to offload excess space, the pace of new sublease additions is expected to slow in the coming quarters.
One of the largest additions to the market was approximately 76,000 square feet at Agoura Hills Business Park in East Ventura County. The sublease extends through October 2034, offering long-term value for the right user. The property is located within a professional business campus and is zoned for biotech and life science uses, positioning it within a specialized segment of the market rather than the general office inventory.
Looking ahead, sublease competition is likely to place continued pressure on landlords offering direct space. As many landlords remain cautious and limit rent reductions to protect asset values, competitive dynamics from sublessors may drive additional concessions. Tenant leverage is expected to persist into 2026.
On the investment side, transaction activity accelerated sharply in 2025. Year-to-date square footage sold increased 214.9% compared with 2024, totaling approximately 1.8 million square feet. Sales volume rose 168.5% to nearly $330 million, rebounding from 2024 levels that were constrained by uncertainty surrounding interest rates. The average building size sold nearly doubled, increasing 99.2% from 14,277 square feet in 2024 to 28,444 square feet in 2025.
Recent transactions illustrate evolving buyer preferences. In Westlake Village, the Johnston Group and Majestic Asset Management, Inc. sold Westlake Gardens, a two-building office campus totaling 99,545 square feet, to Atlantic Pearl Investments, Inc. for $19.25 million, or $193 per square foot. The property was approximately 90% occupied by 33 tenants at closing, with a weighted average lease term of 6.6 years, and traded at a reported cap rate of 9.44% after being marketed from March to November 2025.
In Thousand Oaks, Nearon Enterprises sold the 63,008-square-foot property at 515 Marin Street to Silicon Beach Partners for $9.0 million. The building generated an estimated net operating income of $900,000, reflecting a 10% cap rate, with the seller motivated to complete the disposition before year-end.
In Westlake Village, Davis & LeGate sold a 13,945-square-foot, fully occupied office property to California Educators for $3.25 million, or $233 per square foot. The property was on the market for 504 days, and the buyer intends to occupy a portion of the space while leasing the remainder, with façade improvements already completed.
The increase in transaction velocity and average building size suggests buyers are expanding their strike zone, though demand remains concentrated in well-leased, income-producing assets.
As 2026 begins, Ventura County’s office sector remains in transition. The depth of sublease inventory is creating value-driven opportunities for tenants, while investment activity reflects repositioning strategies and renewed confidence at reset valuations. Both tenants and investors are expected to remain selective as the sector advances along a gradual stabilization path.
