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Radius Insight: Q1 2018 Market Report

Perhaps not surprisingly, sales during the first quarter of 2018 got off to a markedly slower start versus Q1 2017. Altogether the first quarter compiled 14 sales of commercial property totaling approximately $53 Million in volume, not too far off the prior 15-year average of 18.7 sales per quarter but significantly fewer than Q1 2017’s 30 sales and Q1 2016’s 24 sales. In fact, Q1 2018 has been the weakest first quarter since 2013. So what is causing the slow start to the year?

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South Coast Leasing Summary

As expected, Santa Barbara’s office vacancy rate dropped slightly from 6.7% in Q4 2017 to 5.9% in the first quarter of 2018. Average gross achieved rates ticked up from $2.69/SF to $2.93/SF while average gross asking rates remain nearly unchanged at $3.04/SF.

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South Santa Barbara County Multifamily Summary

Just as the Thomas Fire and Montecito mudslides may have impacted the South Coast commercial sales sector, the Multifamily sector also slowed during the first part of 2018, but resilient Santa Barbara is on the mend.

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Radius Insight: Q4 2017 Market Report

The high annual transaction volume that started in 2014 continues. Last year was another strong year with 97 total sales, just six short of 2014’s record 103. The majority of commercial properties sold in 2017 were office buildings (37) followed by retail (24). Though not for lack of demand, industrial and land sales totaled just 17, while there were also two hotel sales. The 4th Quarter’s 22 sales were down from Q1’s high of 31, yet still above the 17 sales-per-quarter average and in line with 2nd Quarter (19) and 3rd Quarter (25)…

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South Coast Leasing Summary

Santa Barbara’s office vacancy rate has been slowly increasing since 2014 bringing the current vacancy rate to 6.7%, the second highest level we have seen over the last 17 years. It would be realistic to expect lease rates to level off or decrease, likely driving vacancy rates back toward 5%…

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South Santa Barbara County Multifamily Summary

We ended 2017 with moderate sales compared to 2016 due solely to lack of inventory. It’s clear strong demand for multifamily isn’t going to wane any time soon. While the Millennial population grows, they remain locked out of the homeownership game. That means as Millennials continue to save for a down payment they must rent. This trend is expected to continue for the next few years…

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Noozhawk: Go Red For Women Event Gets to Heart of Cardiac Disease

Santa Barbara, California – Published 2/7/2018
By Donna Romani for the American Heart Association

The American Heart Association wants women on the Central Coast to know that mothers, daughters, sisters and friends are at risk. Heart disease and stroke kill about one woman every 80 seconds — more than all cancers combined, the association reports.

The good news is, 80 percent of cardiac events may be prevented with education and lifestyle changes, the Heart Association said.

Community members can be part of the change to end heart disease at the 22nd annual Go Red For Women Luncheon.

For more than a decade, Go Red For Women has fought for equal health opportunities for women, the Heart Association said.

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Noozhawk: Santa Barbara City Council Moves Forward With New Rental-Protection Ordinance: Measure would require landlords to give tenants written lease agreements, and tenant-displacement assistance for mass evictions

Santa Barbara, California – Published 1/30/2018
By Joshua Molina

Santa Barbara is moving forward with an ordinance that would provide some rental protections for tenants, although some advocates want even more changes.

The council voted 6-0 to create an ordinance that requires landlords to give tenants written lease agreements because “written rental agreements provide clarity and certainty about the contractual agreement and should be mandatory and promoted through an ordinance or resolution,” according to a city staff report.

The city also agreed to tenant-displacement and relocation assistance for mass evictions.

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Pacific Coast Business Times: Tri-county commercial real estate brokers optimistic

Santa Barbara, California – Published 1/5/2018
By Robert Shutt

Commercial real estate in the Tri-Counties will face a long list of challenges in retail, housing and the development of smart industrial space with multiple stories and integrated computing technology but the region’s top commercial brokers are optimistic about 2018 opportunities.

Traditional brick-and-mortar retail has been taking hit after hit from online outlets like Amazon and has consequently seen a general downturn in profits. However, shopping centers that are anchored by service-oriented retailers like grocery stores and restaurants should be OK, experts said.

“Retailers will be even more conservative with their expansion plans in 2018, looking to increase their online capacity with more store closures and fewer physical openings,” said J.C. Casillas, director of research and public relations at NAI Capital. “There is no new construction in the pipeline, so expect slightly higher vacancies and softer rental rates by the end of the year.”

Another common theme in 2018 will be the conversion of retail space into office space. Four companies in Santa Barbara are currently using downtown retail as office space.

“The trend toward an open, collaborative office environment lends itself nicely to retail spaces,” said Gene Deering, senior vice president at Radius Commercial Group. “Prior to the change in retail landscape, retail lease rates far exceeded office rents — causing all retail spaces to remain retail. Look for this trend to continue.”

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