Average Asking Rent and Vacancy Rate Ventura County Retail Market Outlook 1Q 2018 Rents reflect buildings of 5,000+ SF Source: NAI Capital Research, CoStar, REIS MARKET OVERVIEW The Ventura County retail market started the year off steady with a slight uptick in the vacancy rate, while average asking rent made steady gains. This quarter, the vacancy rate rose 30 basis points over 4Q 2017 to 4.2%, 30 basis points below 1Q 2017. Asking rent averaged $1.98/SF in 1Q 2018, which represented a 1.5% increase over 4Q 2017, and 2.1% over 1Q 2017. Just one project was under construction at the end of 1Q 2018: a 4,000 SF freestanding retail building in Agoura Hills due to deliver in January 2019. Larger retail projects, such as the proposed 500,000 SF Amara in Camarillo, remained on hold as developers reassess the local market. Employment outlook started out strong in the first quarter. From March 2017 to March 2018, 6,200 new jobs were created, pushing the unemployment rate down 110 basis points from 4.7% to 3.6%. The Retail Trade sector saw 0.5% growth with 200 jobs added, while the Leisure & Hospitality sector saw a significant 6.8% growth over 1Q 2017, representing 2,500 new jobs created. TRENDS TO WATCH Ventura County’s retail outlook is expected to remain mixed in 2018 as positive demographic and economic trends balance out the challenges retailers are facing. Historically, Ventura County’s retail market was propelled by tourism as well as its residents’ higher disposable income. The average annual household income in Ventura County was estimated at $115,000 in 2017 and is projected to surpass $140,000 by 2022. Due to strong employment and high income, consumers in Ventura County will sustain demand for well-located retail properties. Several retail centers in the County, such as Simi Valley Town Center, are struggling with high vacancy. The Simi Valley City Council placed proposed redevelopment of the Simi Valley Town Center as a mixed-use retail center under additional economic review. Construction would not begin until 2019 at the earliest should the Council elect to proceed with the project. Asking Rental Rates Sale Prices Availability/Vacancy Rates Landlord Concessions Sales/Leasing Volume New Construction NAI Capital Research www.naicapital.com MARKET OUTLOOK Vacant (%) Asking Rent (Price/SF) 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% $1.50 $1.60 $1.70 $1.80 $1.90 $2.00 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18
Transcript
Average Asking Rent and Vacancy Rate
Ventura CountyRetail Market Outlook 1Q 2018
Rents reflect buildings of 5,000+ SFSource: NAI Capital Research, CoStar, REIS
MARKET OVERVIEWThe Ventura County retail market started the year off steady with a slight uptick in the vacancy rate, while average asking rent made steady gains. This quarter, the vacancy rate rose 30 basis points over 4Q 2017 to 4.2%, 30 basis points below 1Q 2017. Asking rent averaged $1.98/SF in 1Q 2018, which represented a 1.5% increase over 4Q 2017, and 2.1% over 1Q 2017. Just one project was under construction at the end of 1Q 2018: a 4,000 SF freestanding retail building in Agoura Hills due to deliver in January 2019. Larger retail projects, such as the proposed 500,000 SF Amara in Camarillo, remained on hold as developers reassess the local market. Employment outlook started out strong in the first quarter. From March 2017 to March 2018, 6,200 new jobs were created, pushing the unemployment rate down 110 basis points from 4.7% to 3.6%. The Retail Trade sector saw 0.5% growth with 200 jobs added, while the Leisure & Hospitality sector saw a significant 6.8% growth over 1Q 2017, representing 2,500 new jobs created.
TRENDS TO WATCHVentura County’s retail outlook is expected to remain mixed in 2018 as positive demographic and economic trends balance out the challenges retailers are facing. Historically, Ventura County’s retail market was propelled by tourism as well as its residents’ higher disposable income. The average annual household income in Ventura County was estimated at $115,000 in 2017 and is projected to surpass $140,000 by 2022. Due to strong employment and high income, consumers in Ventura County will sustain demand for well-located retail properties. Several retail centers in the County, such as Simi Valley Town Center, are struggling with high vacancy. The Simi Valley City Council placed proposed redevelopment of the Simi Valley Town Center as a mixed-use retail center under additional economic review. Construction would not begin until 2019 at the earliest should the Council elect to proceed with the project.
Dollar Tree 703-761 N Wendy Dr East Withheld 14,000
Phenix Salon Suites
1235-1355 W Channel Islands Blvd
West Withheld 6,427
Tenant Not Listed
2855 Johnson Dr West $1.40 5,019
Baja Fresh650-668N Moorpark Rd
East $3.75 3,000
SBR Signs1182 E Thousand Oaks Blvd
East Withheld 2,051
*All rents are NNN unless otherwise notedSource: CoStar
RBA includes all retail buildings. Rents relfect buildings of 5,000 SF and greater.Source: NAI Capital Research, CoStar
LeasingLeasing activity totaled 166,497 SF in 1Q 2018, which represented an 11.5% decline over 4Q 2017 and a substantial 50.5% drop over 1Q 2017. Asking rent averaged $1.98/SF across all property types, up 1.5% from 4Q 2017 and 2.1% over 1Q 2017. Mall properties’ rent held steady at $2.43/SF for the third straight quarter whereas Neighborhood Centers saw a slight decline of 3.8% compared to 1Q 2017. Average asking rent for Power Centers rose 23.6% from 1Q 2017 to $1.83/SF despite an 80-basis point increase in the vacancy rate. Lifestyle Centers make up less than 1% of total retail space in Ventura County, yet rent for Lifestyle Centers soared 81.1% to $4.80/SF from 1Q 2017 due to high asking rents. Selleck Development Group, Inc. is asking $5.00/SF for space at Shoppes at Westlake Village, an upscale lifestyle center in Westlake Village. In this quarter’s largest transaction, Dollar Tree, Inc. leased 14,000 SF at the Casa Conejo Plaza Shopping Center in Newbury Park.
SalesSales activity totaled 219,675 SF in 1Q 2018, a 32.9% decline over 4Q 2017, yet surged 57.1% over 1Q 2017. Sale prices made moderate 10% gains compared to 1Q 2017, averaging around $334/SF. Cap rates averaged 5.50%, a 20-basis point decline over 1Q 2017. This was markedly lower than comparable retail properties in the neighboring San Fernando Valley where sale prices averaged $382/SF and cap rates averaged 4.50%. The average size of retail buildings sold in 1Q 2018 was 5,109 SF, about half of the 10,000 SF average size seen in the past five years. Most buyers in Ventura County are either small investors or owner-users, which explains their preference for smaller retail centers and freestanding properties. In the largest sales transaction this quarter, a private investor purchased the 67,500 SF Port Place Community Center in Oxnard for $333/SF.
Source: CoStar
Ventura CountyRetail Market Outlook 1Q 2018
WestCamarilloFillmoreOjaiOxnardSanta PaulaVentura
EastAgoura HillsCalabasasMoorpark Newbury Park Simi Valley Thousand OaksWestlake Village
Ventura CountyRetail Market Outlook 1Q 2018
Realizing Potential.Delivering Results.
No warranty, express or implied, is made as to the accuracy of the information contained herein. this information is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and is subject to any special listing conditions imposed by our principals. cooperating brokers, buyers, tenants and other parties who receive this document should not rely on it, but should use it as a starting point of analysis, and should independently confirm the accuracy of the information contained herein through a due diligence review of the books, records, files and documents that constitute reliable sources of the information described herein. NAI Capital CA BRE #01990696
NAI Capital Research
J.C. CasillasVice PresidentResearch, Marketing and Communications [email protected]
Jillian OlivasResearch and Communications Assistant [email protected]
