The Valley & Ventura Market Continues Positive Stride>
- The San Fernando Valley and Ventura County office market closed the fourth quarter with positive movement as net absorption recorded 289,600 square feet.
- The office market vacancy rate continued to fall, decreasing 90 basis points to 11.8%.
- Rental rates increased by $0.02 from the third quarter to $2.50 per square foot (PSF) full service gross (FSG).
- No new projects were delivered in the fourth quarter, though two projects totaling 274,300 square feet are currently under construction.
- The Los Angeles County unemployment rate increased to 4.7%, an increase of 20 basis points over last year. Leisure and hospitality listed the largest year-over-year employment gain by adding 23,500 jobs. Professional and business services posted the second greatest growth, adding 18,600 jobs.
San Fernando Valley and Ventura County Office Market:
The San Fernando Valley and Ventura County office market recorded positive movement. Net absorption recorded at 289,600 square feet in the fourth quarter, while vacancy declined by 90 basis points. Asking rental rates recorded $2.50 PSF FSG, a 7.3% year-over-year increase. With only two new projects under construction on the horizon, the market will remain supply constrained and absorption is expected to remain positive. Given these market conditions, San Fernando Valley and Ventura County office market trends are expected to witness positive tenant demand.
Investor sentiment has become more cautious as borrowing costs and interest rates continue to rise. It is expected that this will lead to an uptick in capitalization rates and a leveling of investment sales prices.