Market Drivers
DIRECT NET ABSORPTION in 1Q 2023 was negative 16,633 SF, the region’s second consecutive quarter of negative net absorption. Direct vacancy rates increased by 50 basis points (bps) quarter-over-quarter to 2.8%, double the 1.4% direct vacancy rate reported this time last year. Despite the uptick in vacancy, it remains low compared to pre-pandemic figures of 3.8% in 2019.
SUBLEASE VACANCY in Ventura County was a low 0.4%– 10 bps higher than the previous quarter.
AVERAGE RENTAL RATES continue to rise to an all-time high of $1.22/SF NNN, a 24.3% increase year-over-year.
LEASING ACTIVITY totaled 385,659 SF in the first quarter, a 31% decrease year-over-year.
CURRENTLY, VENTURA COUNTY has 260,015 SF of industrial space under construction with year-to-date deliveries totaling 382,342 SF. Much of the delivered industrial product came from Tapo Canyon Commerce Center in Simi Valley. This five-building industrial park spans 342,557 SF of warehouse space.
Economic Review
IN JANUARY Ventura County’s unemployment rate increased slightly to 4.2%, up from 3.2% a month prior. The region’s unemployment rate topped out at 14.3% at the height of the COVID-19 pandemic layoffs.
PORT HUENEME continues to alleviate supply chain issues.
SOAR (SAVE OPEN SPACE & AGRICULTURAL RESOURCES) will continue to hinder new development and keep prices high.
Near Term Outlook
INDUSTRIAL DEMAND will remain high, due to desirability of doing business in Ventura County, maintaining a low vacancy rate.
RECESSION CONCERNS and rising construction costs will hinder new developments.
INDUSTRIAL SALE VOLUME fell 94% year-over-year throughout the County, following the nationwide trend of investment sales activity decreasing—most likely due to economic uncertainty coupled with increased interest rates.
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