Office Vacancy Down in Santa Barbara & Goleta: Sign of Market Stabilization?
Leasing trends are suggesting stabilization throughout the south Central Coast. As the 2nd Quarter 2012 came to a close, Santa Barbara’s office market saw vacancy rates decline slightly from 6.2% at the end of the 1st Quarter to 5.8% at the end of the 2nd Quarter, though vacancy rates have remained fairly consistent over the past three years.
In addition, we saw a slight increase in asking rates from $2.26/SF modified gross at the end of the 1st Quarter to $2.36/SF modified gross at the end of the 2nd Quarter.
Also, of the 13 office leases that were completed during the 2nd Quarter, ten were less than 3,000 SF. Looking to the end of 2012, we anticipate steady leasing activity for tenants 3,000 SF and below with the possibility of some movement of a couple notable larger tenants as their leases come up at year end.
Goleta’s office sector continued to show improvement throughout the 2nd Quarter with a reduction in vacancy from 10.2% to 8.3%, the lowest rate since 2007. The average asking rate continued to stay relatively steady, only increasing slightly by $0.02 to $1.66/SF on a modified gross basis.
One interesting trend we have noticed is that some tenants have chosen to leave the Santa Barbara office market opting to relocate to the less expensive Goleta market. Download a full copy of Radius Insight, 2012 South County Commercial Real Estate 2nd Quarter Report.
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