Market Watch: Commercial Sales Turnaround
After three years of lackluster commercial sales figures, in 2011 the South County posted the largest number of sales since 2007 at 71. In fact, sales in 2011 were at 110% of the 15-year historical average (excluding apartments). Additionally, the sales were split fairly evenly between investment sales and owner/user properties.
A couple of highlights from the fourth quarter include the sale of the property at the Cabrillo Business Park to Deckers Outdoors, Inc. for a little under $20 million. Deckers plans to build a new 250,000sf headquarters on the site in 2012-2013. Additionally, the 20,000sf Citibank building at 3757 State Street (next to Whole Foods) sold in early October to an investor. Finally, a 34,000sf office/R&D building at 26 Coromar in Goleta sold in December to an owner/user.
Regarding investment sales, we are seeing capitalization rates between 5.5% and 7% (from 5.5%-6.5% for higher quality properties, and 6.5%-7% for secondary properties). We expect heavy activity to continue through the first quarter of 2012 as there were several properties in escrow at the end of 2011.
As 2012 moves forward, it’s clear a slow recovery in the commercial real estate market is underway. Only time will tell if this steady upswing continues, but one thing is certain: there remain plenty of opportunities for growth.
Download a full copy of Radius Insight, 2011 South Coast Commercial Real Estate Year-End Report.
The recently completed Cabrillo Pavilion, 1118 E. Cabrillo Blvd., is the winner of Santa Barbara Beautiful’s coveted 2022 President’s Award, which will… Read more »