Stable Market Activity During 3rd Quarter
The San Fernando Valley and Ventura County office market closed third quarter 2016 with positive market activity as net absorption recorded 61,000 SF and vacancy declining by 10 basis points. With no new construction seen in the future, absorption is expected to remain positive. The unemployment rate fell to 4.6% in August 2016, which was last seen nine years ago. Given these market conditions, the San Fernando Valley and Ventura County office market trends are expected to move in a slow positive growth rate.
The San Fernando Valley and Ventura County office market closed 3rd quarter with net absorption recording positive at 61,000 square feet (SF).
The office market vacancy trends slightly decreased in comparison from last quarter by 10 basis points to 14.7%.
Rental rates continued to slowly increase at a quarterly average of 0.5%. Third quarter overall rental rates recorded at $2.25 per square foot (PSF) full service gross (FSG).
3075 Townsgate Rd was delivered during third quarter. The office building consist of 60,647 SF Class A product. There are no new office projects currently under construction.
The overall economy continues to see solid growth in third quarter. Los Angeles County employment grew by 73,900 jobs resulting in a growth rate of 1.7%.
Vacancy in the San Fernando Valley & Ventura County office market should remain on the current path of stable decrease due to lack of new construction and favorable forecasted employment growth. As vacancy continues to remain stable and trend downward, both absorption and leasing activity are expected to remain positive through the end of 2016. As vacancy rates remain stable and continue to trend downward, asking rental rates will push higher. No new inventory will be delivered for the remaining part of 2016. Given the current market conditions, owners are expected to remain bullish with pricing.