With a direct vacancy rate for office space now at 8.6 percent and little new space due to come online until next year, a just-released report by Colliers International predicted that the vacancy rates in the San Fernando Valley will drop to the 7 percent range in the remainder of 2006. Colliers’ first quarter office report also predicted that rental rates for office space will “continue to move upward at a moderate to strong pace over the next one to two quarters, and then climb even more sharply as vacancy rates drop below 8 percent.” Average asking rents for the first quarter, $2.11 per square foot, were actually down from the prior quarter’s $2.13 per square foot, but the Colliers report attributed the decline to the limited availability of Class A space and a resulting shift to Class B space. On a same space basis, Class A rental rates were up 0.9 percent during the quarter and 3.6 percent year over year. The Colliers report also noted that vacancy rates were highest in the West Ventura County area where the 18.4 percent vacancy rate was attributed to 40,000 square feet of new space that was completed during the first quarter.
