Steady Market Activity Marks End Of 2016
The San Fernando Valley and Ventura County office market closed 2016 with positive market activity as net absorption recorded 33,600 SF and vacancy declined by 10 basis points. Rents ended the year with a 3.3% year-over-year increase, a welcome change for landlords from the previous 2 years of essentially flat rate movement. With no new construction seen in the future, the market will remain supply-constrained and absorption is expected to remain positive. 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 2016 with net absorption recording positive at 33,600 square feet (SF).
The office market vacancy rate continued to descend incrementally by 10 basis points to 14.6%.
Rental rates increased at a quarterly average of 0.4%. Fourth quarter overall rental rates recorded at $2.26 per square foot (PSF) full service gross (FSG).
No new projects were delivered in the fourth quarter, and no new projects are currently under construction.
The overall economy continues to see solid growth in fourth quarter. Los Angeles County non-farm employment grew by 75,300 jobs from August, resulting in a growth rate of 1.5%.
Vacancy in the San Fernando Valley & Ventura County office market should remain on the current path of stable decrease into 2017 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 early 2017. As vacancy rates remain stable and continue to trend downward, asking rental rates will push higher.