Market Drivers
Direct net absorption recorded positive for only the second time in 12 quarters, posting 208K SF at the end of Q2. Since mid-2022, nearly every quarter has recorded negative net absorption resulting in total annual negative net absorption the past two years. However, 2025 is trending in a positive direction so far for the first half of 2025.
Vacancy and availability rates both climbed to a 5-year record high in Q2 2025 to 4.2% and 6.3% respectively. Despite rising vacancies and availabilities over the past couple years, the market is still relatively tight when compared to the 15-year historical average, as well as in comparison to most other major industrial markets along the West Coast.
Leasing activity in the first half of 2025 fell short when compared to the first half of 2024, a decrease of 28% posting at 931K SF for the first two quarters combined. Leasing remains steady among the small-bay properties under 50K SF and although there are a handful of small-bay properties in the pipeline, it is unlikely these new projects will meet the current local demand for those spaces.
Average rental rates in the Ventura industrial market reached a record high of $1.29 PSF NNN, an 8.4% increase YOY from $1.19 PSF NNN in Q2 2025. Although annual rent growth throughout the county have somewhat stalled in the past year, the first half of 2025 is proving to show some significant increases in comparison.
Economic uncertainty coupled with high interest rates continue to limit sales activity in the first half of 2025. Q2 posted just 424K SF of sales volume, a notable 58% drop from over 1M SF sold in Q2 2024 last year. Current YTD for the first half of 2025 posted 50% less volume than the first half of 2024.
Economic Review
In May, the Oxnard-Thousand Oaks- Ventura MSA reported a preliminary unemployment rate of 4.1%, an increase from 3.7% when compared to the same time last year but down 20 bps from the month prior in January that posted at 4.3%.
Port of Hueneme, the only commercial deep-water port between Los Angeles and San Francisco, is ranked amongst the top ten Ports in the US for auto imports and fresh produce. The port recently had its highest performing revenue year, reflecting a strong volume from its car, container and banana businesses. However, the port’s
executives have expressed concern with the change in automobile and produce tariffs that will likely impact this next year’s revenue and volume.
NEAR-TERM OUTLOOK
Investors in the industrial market remain cautious, not only in the local Ventura region but across the nation, as elevated interest rates persist. In spite of ongoing challenges, Ventura retains strong investor appeal, driven in part by its high rental rates like many of the Southern California industrial markets. Although transaction activity is still trailing historical averages, the region’s solid market fundamentals continue to reinforce its status as a high-performing industrial region.
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