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FROM BAD TO WORSE: VACANCY HITS 17.3% in THE SFV & VENTURA COUNTY OFFICE MARKET
The first three months of 2009 saw fundamentals in the San Fernando Valley & Ventura County office market further deteriorate. With vacancy rates increasing 180 basis points from a revised 15.5% at year-end 2008 to 17.3% in Q1 2009, it appears that the area has a way to go before it reaches a bottom. In addition, weighted asking rental rates decreased for the fourth consecutive quarter to $2.47 per square foot per month, Full Service Gross (FSG) virtually erasing any rental rate growth seen over the last two years. Although the 453,700 SF of leasing activity represents a 16% increase over last quarter, it also represents a 36% decline in leasing activity seen just a year ago as most companies who are in the market for office space, look to downsize and survive 2009.
In Q1, 78,600 SF was delivered to the market with an additional 283,500 SF underway. These figures are much lower than the quarterly construction average of 1.0 million SF that has been seen over the last couple of years. While this lower construction level has finally given the area’s office
market a respite as tenants and landlords seek a new equilibrium between supply and demand, it is widely expected that the region’s economy will remain weak throughout most of 2009. As a result, the market-wide office vacancy rate is forecasted to rise above 20% by mid-year.
Contact Michael Soto at 213.532.3220 for more information.
  OFFSFVVC09Q1.pdf
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