Santa Barbara Commercial Realty

High Demand for State St. Properties

Santa Barbara Commercial Real Estate Articles

High Demand for Retail Space in Santa Barbara Area

By Gene McKnight, Pacifica Commercial Realty
October 1, 2007

With so many “Available” signs on State Street retail buildings anyone might think that there is a problem finding retail tenants for Santa Barbara.

When walking or driving State Street one sees “For Lease” signs on almost every block from the 300 block to 1200 block.
For instance, you have 314 State (In and Out Paint, 9,127 s.f.), 418 State (Scavenge 6,000 s.f.) 530 State (Open Wide 11,420 s.f.) 610 State (Cost Plus 24,000 s.f.), 915 State (former Boon Me 4,450 s.f.), 1123-1135 State (former Alpha Thrift 11,880 s.f.), 1230 State (former Copeland Sports 8,500 s.f.).

In addition to building with signs “For Lease” you also have buildings, which are “On the Market” without signs that you may not be aware of. For instance 424 State (PEP Boys 13,000 s.f.), 928 State (Pier One Imports 18,743 s.f.), and 1117 State (Kim 3 Furniture 11,343s.f.)

As of today there is an over125,000 square feet of retail space currently on the market “For Lease” located between the 300 block and the 1200 block of State Street. However, of that 125,000 square feet of available space approximately only 18,000 square feet is actually “vacant” with the remaining 107,000 square feet or 86% of space being currently occupied by tenants which are either leaving the market, looking for other sites or leasing short term.

While it looks like there’s too much vacancy the reality is that demand for much of the available spaces is very high. Of the available space mentioned above, virtually all the spaces have either significant interest from retailers, offers on the table, or actual signed leases. Interest for these buildings is coming primarily from national and international retail tenants who have targeted Santa Barbara for new stores. Retail tenants such as Apple Computer, Bevmo, Jos. A. Bank, REI, DSW Shoes, Panera Bread, Tilly’s and H & M are in the market to find suitable locations. Additionally Barnes and Noble Bookstore is looking for larger premises on State Street. Some tenants will succeed while others will just have to wait.

At the recent International Council of Shopping Centers (ICSC) held in San Diego, which I attended, several local commercial real estate brokers and retail tenants were searching and negotiating for Santa Barbara area buildings. The name Santa Barbara is very familiar to the majority of national retail tenants; however, many of these tenants understand that it’s too difficult to find entry into our market due to relative high lease rates compared to our small demographics and an approximate one   (1%) to two (2%) percent retail vacancy rate.

One thing that you will be certain to see in the future on State Street are new retailers vying for your dollars.

If you have any questions or comments I can be reached at gmcknight@pacificarealesate.com.  Or visit our web site at www.pacificarealesate.com.