Second Quarter 2025
Ventura County Retail Market Adapts to Shifting Demographics and Economic Pressures
Vacancy rose to 6.2% in the second quarter as population shifts and economic pressures influenced leasing, development, and investment activity.
Retail growth holds steady with selective tenant demand, cautious construction, and shifting investor strategies five years after the pandemic.
MARKET OVERVIEW
Ventura County’s retail market recovery, five years post-pandemic, remains gradual. In Q2 2025, the vacancy rate edged up 10 basis points quarter-over-quarter and 140 basis points year-over-year to 6.2%. Market growth has been restrained by population out-migration tied to housing affordability challenges, with the county’s population dipping from 736,428 in 2024 to 735,772 in 2025, according to the California Department of Finance. Even so, the cities of Ventura and Oxnard posted modest gains of 0.6% and 0.2%, respectively, reflecting pockets of expansion. This growth has supported new retail development, with 97,285 square feet delivered in the first half of 2025, though construction activity slowed sharply—down 62.8% year-over-year to 49,076 square feet.
Leasing activity this quarter totaled 197,254 square feet, led by tenants such as Daiso, opening a new store at the Marketplace at Oxnard; Goodwill, set to open at Carmen Plaza in Camarillo; Spirit Halloween, leasing space at Camarillo Village Square; and Five Below, planning a new location in Newbury Park. Average rents showed signs of stabilizing, holding flat quarter-over-quarter at $2.17 per square foot per month triple net—just 0.5% above Q2 2020 at the onset of the pandemic and down one cent year-over-year.
Development activity reflects caution as higher construction costs, inflation’s impact on consumer spending, rising interest rates, and slower rent growth temper momentum. Year-to-date sales volume reached nearly $47.9 million, down 76.8% from the first half of 2024, though Q2 was nearly twice Q1’s pace after a slow start to 2025. Despite the rebound, the average sale price per square foot fell 20.4% year-over-year to $485, while total square footage sold increased 7.3%. The average capitalization rate rose 140 basis points to 5.6%. Investors are weighing retail class quality, pricing disparities, tighter credit, and shifting market fundamentals, which continue to drive fluctuations in transaction activity.
TRENDS TO WATCH
The fundamentals of Ventura County retail continue to evolve as we move into the second half of 2025. Migration, economic conditions, and employment trends remain key drivers of growth, though at a more moderate pace. According to the California Employment Development Department, the Oxnard-Thousand Oaks-Ventura MSA unemployment rate rose to 5.4% in July 2025, up from 5.0% in June and above the 5.0% rate a year earlier.
Population out-migration continues to affect retail supply and demand, particularly as residents move to neighboring counties in search of more affordable housing. According to the California Department of Finance, Thousand Oaks (-0.7%), Moorpark (-0.8%), and Camarillo (-0.8%) recorded the steepest population declines. As of Q2 2025, just 49,076 square feet of retail space were under construction across the region, down 35.4% quarter-over-quarter and 62.8% year-over-year. East Ventura County accounted for 75.5% of the total, while West Ventura County represented 24.5%. Nearly all newly completed space this year (98.2%) has been concentrated in the West submarket.
Vacancy growth remains subdued as retailers backfill space vacated by bankruptcies and closures among drugstores, apparel chains, and home goods stores. Investor and owner-user sales reflect this shift in confidence. Engstrom Properties sold a 3,391-square-foot retail building in Westlake Village to a private investor for $4,800,000, or $1,415 per square foot. The property was fully leased to Starbucks on a 10-year absolute NNN lease with 10% rent increases every five years. In Camarillo, a 2,341-square-foot retail building occupied by Jack In The Box sold for $2,225,000, or $950 per square foot. Another Camarillo property, a 1,970-square-foot building, sold for $1,160,000; the buyer, an owner-user, will occupy one suite for their insurance business. These transactions highlight steady investor demand and owner-user confidence in Ventura County retail.
Looking ahead, rising tariff costs pose a key uncertainty, potentially driving higher retail goods prices and slowing leasing momentum. While U.S. consumer spending has remained resilient, retailers are adopting creative strategies to absorb costs and avoid widespread price hikes. Flexible lease terms, strategic concessions, and selective investment are supporting measured progress. Competition for prime retail space is expected to remain strong as available options shrink, with elevated prices for well-located assets and softer rents for secondary locations reflecting both investor confidence and retailers’ adaptive strategies during the market’s recovery.
