News Alert: Radius Forecast Signals Market Shift: “The Market Isn’t Slowing — It’s Sorting”

At its 16th Annual Real Estate & Economic Forecast on March 12 in Santa Barbara, Radius Commercial Real Estate delivered a clear message to a packed room of industry professionals: the Central Coast market is not experiencing a broad slowdown, but rather a decisive shift toward selective performance, where quality assets, flexible deal-making, and policy conditions are increasingly determining outcomes.

The program brought together insights from Radius brokers and market experts Rhonda Henderson, Gene Deering, Brad Frohling, and Steve Golis, alongside keynote economist Dr. Christopher Thornberg of Beacon Economics, offering a comprehensive view across leasing, investment sales, multifamily housing, and macroeconomic trends.

Across presentations, a consistent theme emerged — a growing divide between high-performing, well-capitalized properties and older or less adaptable assets. In the leasing market, landlords who invest in tenant improvements and respond quickly to deal opportunities are achieving premium rents, while outdated office inventory faces extended vacancy and downward pressure.

Retail showed continued resilience, particularly in smaller, neighborhood-oriented spaces, while submarkets such as Goleta are gaining momentum as centers for innovation and growth, supported in part by institutional investment and university-driven initiatives.

On the investment side, transaction activity has moderated, reflecting higher interest rates and increased selectivity among buyers. However, notable large-scale transactions and continued demand for high-quality assets signal underlying confidence in the region’s long-term fundamentals.

Multifamily housing remains one of the most pressing challenges, with limited new construction failing to keep pace with demand. Speakers emphasized that supply constraints, combined with evolving regulatory frameworks, are reshaping both development feasibility and investor behavior.

Public policy was a central focus throughout the event, with discussion around rent control measures, transfer tax proposals, and permitting timelines. These factors are increasingly influencing capital allocation decisions, with several speakers noting that regulatory conditions are becoming as critical as traditional market fundamentals.

“When the economics change, capital moves,” was a key takeaway underscoring the day’s discussions — highlighting the growing importance of aligning policy with investment realities to sustain economic vitality.

The event concluded with a macroeconomic outlook from Dr. Christopher Thornberg, who addressed national trends in interest rates, labor markets, and economic sentiment, placing local market dynamics within a broader context.

Radius’ annual forecast continues to serve as a leading forum for real estate insights on the Central Coast, bringing together data, expertise, and community dialogue at a pivotal moment for the region.

To view the full event recording, visit https://vimeo.com/radiuscommercial/2026forecast