Quoting The New York Times, “a firming up, if not quite a comeback,” consistent with local economic trends, is the description of the Ventura County general purpose, multi-tenant office market provided by Lee & Associates’ in its second quarter report on the local market. Reis’ data on this small, 8.3-million-square-foot market (an afterthought to the huge L.A. and Orange County markets to its south) lends credence to the observation. Including negative 12,000 square feet of negative net absorption during the second quarter, the year-to-date total for the first half of the year was positive 115,000 square feet. While July and August combined produced another loss—9,000 square feet—modest positive activity over the remainder of the year should keep the market afloat. After declining notably during the first quarter, the vacancy rate, accordingly, has been inching upward: second quarter’s 15.4% was up 20 basis points from the quarter before; August’s 15.5% added 10 more points. Rents, also “firming” but not yet coming back, were flat, more or less, in 2011. At $24.19 psf and $20.68 psf as of the second quarter of 2012, the mean asking and effective rates each were down 0.1% for the period and were essentially unchanged since year-end. The flat performance indicated for July–August, however, should be followed by measurable gains over the remainder of the year.
Construction of competitive general purpose office projects is non-existent at present. Indeed, no space of this type has completed construction here since 18,000 square feet delivered in 2009. That could soon change, however. In June, the Ventura County Star reported at the time, the city of Oxnard approved plans for the 430-acre Sakioka Farms business park, to be developed on largely rural land. A 10-to-20-year phased build-out is expected along with the creation of 15,500 jobs. Up to 8.5 million square feet of commercial development in a wide variety of types are planned. The first phase will include 400,000 square feet of office space, Reis reports. Also in the planning pipeline is the 225,000- square-foot second phase of the Westlake Plaza development in Thousand Oaks.
The negative net absorption that fell upon the market in the second quarter and that continued through August should be reversed by modest positive activity over the remainder of the year. A year-end vacancy rate of 15.1% is expected. Improved rent growth is expected as well: gains of 0.7% and 1.0% are projected for the asking and effective averages for the year. Gradual improvement should continue in 2013.