According to Deloitte, economic, social, and digital hurdles will contribute to California’s commercial real estate market volatility in 2022. The following are ten changes to look out for in Ventura County commercial real estate.
Recovery of the urban core
Ventura County as a whole will see a slow but steady recovery in its downtown areas. While 2021 saw a mass exodus from cities, it’s expected that many urban environments, such as Thousand Oaks will see an influx of residents and workers. The return to in-person work will drive commercial real estate sales, and some companies will likely be looking for increased square footage to space out employees.
Flex spaces
Flex spaces are a healthy option for business owners seeking a multipurpose space. As more companies search for large spaces, commercial buildings, such as warehouses, will become hot commodities. In December 2021, a six-unit industrial building in Simi Valley sold for $46.4 million, and a few months prior, a large industrial distribution center sold for $128 million. Thus, the demand is there, and businesses are willing to pay top dollar.
Increase in multifamily homes
In 2022, there will be an increase in multifamily home construction, seeing as Ventura County needs more housing to accommodate its growing population. From 1969 to 2020, the county’s population rose from 369,811 to 847,387— with an expected increase in the coming years. This increase in population is due, in part, to Ventura County’s healthy economy and diverse demographics.
Bounce back of the hospitality industry
As travel picks up, hotels, restaurants, and entertainment venues are in high demand. Note, a full recovery in hospitality will take time, but demand for these venues will only increase as the months go by. Additionally, should there be a significant slow down in COVID-19 variants, a strong bounce-back is likely.
Retail is recovering
Brick-and-mortar retail will make a strong comeback in the coming year. While consumers have grown accustomed to online shopping for convenience and safety, a large group still prefers shopping in person. Patrons miss the one-on-one interaction with business owners and shopkeepers, and they want to be able to see and feel what they’re purchasing.
Crypto is in play
Cryptocurrency may soon be a trend in commercial and residential real estate. This phenomenon is catching the attention of numerous prominent players in the crypto world—particularly investors who are willing to put their money down on a potentially risky opportunity. In terms of real estate, crypto can offer buyers and sellers a chance to engage in the process anonymously.
Demand for film studios
Film studios have quickly become a hot commodity to real estate investors. The need for more studio space has increased with the influx of streaming platforms producing their own content. There are many film studios in Ventura, mostly smaller productions; however, it’s only a matter of time before larger production companies such as Amazon and Netflix move north.
More outdoor space
Outdoor spaces, such as rooftop terraces and patios, have become commonplace in office buildings, restaurants, and various commercial venues where people congregate—especially since the onslaught of the pandemic. People want the option to spread out, and public outdoor spaces allow for just that—all while soaking up the fabulous California sun. If you happen to be selling a commercial property, it’s wise to build in an outdoor space, as it can boost your listing’s popularity.
Industrial properties on the rise
If you’re looking to sell a commercial property in Ventura County, things are looking especially hot in the industrial market. Expect a healthy amount of offers if you’re selling an industrial building—like a warehouse. In late 2021, industrial property vacancy rates in the Los Angeles area fell under 4.5%, according to Allen Matkin and UCLA Anderson’s Commercial Real Estate Survey. These rates will continue to decrease well into 2024. Many retail companies, for example, need to increase the size of their warehouse facilities to fulfill the high number of orders.
More technology for tenants
If you’re within Ventura County, be on the lookout for increased reliance on technology—not just for sales but tenant experience. More commercial properties have implemented touchless technologies to keep spaces sanitized and clean. This technology includes building access points (entrances and exits) and capacity management systems to help screen employees for security and health-related matters.
According to The Real Deal, home values in Southern California have gradually increased over the past year, with a median price of $697.5k. This high figure is due, in part, to more buyers looking for larger living spaces—the same goes for commercial spaces. People want and need more space to adhere to social distancing guidelines.
Ventura County is ripe with opportunity and room for growth
Just how much the Ventura County commercial real estate market grows depends mainly on the unemployment rate–which currently sits at about 4.4 percent as of the end of 2021. Looking ahead to current projections, this number will decrease.
If you’re looking to purchase commercial real estate in 2022, you’re looking at a much larger return on investment than if you were to buy a four-unit income property. Now is a great time to invest because of high inflation and low-interest rates — you’ll get more value for your dollar. Additionally, investing in commercial real estate allows you to build long-term wealth; you can deduce the property’s value from your tax returns, and there will be less tenant turnover. Most businesses in commercial buildings sign five-year leases. So, you know you can depend on rent coming in every year.
If you’re interested in learning more about Ventura County real estate, check out the following resources:
Property Valuation Estimate: See how the Cohen | Debuiser Team can maximize the value of your property with this free, no-commitment valuation estimate.
VCCAR Magazine: The Ventura County Coastal Association of Realtors is the primary source of information for local, real estate, and national news. This includes information and insight on upcoming events, activities, educational programs, business trends, and legislation in the real estate industry.
Research Report: Commercial Real Estate Development Association’s latest research report addresses how properties, particularly office, industrial, and mixed-use properties, impact and benefit communities throughout North America.
Real Estate Reference Book: California Department of Real Estate provides references for sellers and buyers in California, such as brokerage information, business opportunities, and valuation guidelines
Marketing Tools: The California Association of Realtors provides a one-stop-shop for tools and resources to educate consumers about the intricacies of buying and selling a home. Various issues can arise in buying or selling a home, making the transaction unnecessarily complicated.
Ready to invest in Ventura Country real estate?
The Cohen | Debuiser Team is a leading commercial real estate group with Marcus & Millichap, focusing on office, industrial, and retail investment sales in Ventura, Santa Barbara, and Los Angeles Counties. Across all Marcus & Millichap teams, The Cohen | DeBuiser Team ranks #7 in the nation, with 23 closings and $1.9 million in gross revenue for 2021. Whether buying or selling, contact The Cohen | DeBuiser Team for expert insights on commercial real estate in Ventura County.
