Steady Market Activity Marks Mid-Year 2017
The San Fernando Valley and Ventura County office market recorded positive market absorption as net absorption recorded 129,500 SF and vacancy declined by 40 basis points during mid-year. Rents ended second quarter with a 1.8% year-over-year increase, as rental rate remain unchanged compared to last quarter. 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 second quarter with positive net absorption recording at 129,500 square feet (SF).
The office market vacancy rate continued to decrease incrementally by 40 basis points to 14.0%.
Rental rates remained unchanged from first quarter’s overall rental rate of $2.27 per square foot (PSF) full service gross (FSG).
No new projects were delivered in the second quarter, and no new projects are currently under construction.
The overall economy continued to see solid growth in second quarter. Los Angeles County non-farm employment grew by 55,700 jobs year-over-year, resulting in a growth rate of 1.3%.
Vacancy in the San Fernando Valley & Ventura County office market should remain on the current path of stable decrease through the second half of 2017 due to lack of new construction and forecasted employment growth. As vacancy continues to remain stable and trend downward, both absorption and leasing activity are expected to remain positive through the second half of 2017. As vacancy rates remain stable and continue to trend downward, asking rental rates will remain stable. Minimal federal interest rate increases should help keep investment activity steady through the second half of 2017.