Marshalls, which has a new landlord, occupies 38,000 square feet of retail space in downtown Santa Barbara. (STEVE MALONE/NEWS-PRESS)

The nearly $14.3 million sale of the building at 900 State St., leased by the Marshalls retail store chain, makes for the largest commercial real estate deal in downtown Santa Barbara this year.

The new owner, 900 State Street Associates LLC, acquired the property recently in an off-market deal, confirmed Steve Brown and Austin Herlihy, the Radius Group Commercial Real Estate & Investments agents who represented the buyer in the sale.

The 38,000-square-foot building, which Marshalls has leased since taking over the space from the defunct Borders bookstore chain in 2011, last sold for $10 million, said Mr. Herlihy. The deal to acquire the three-story structure translates to $375 per square foot.

“The time was right and the right buyer came along,” said Mr. Herlihy, referring to the profit realized by the seller, which he described as an investment group out of Los Angeles.

“It was an all-cash transaction,” he told the News-Press.

Mr. Herlihy described the investor as “a guy who lives out of state but has a second home” in Santa Barbara.

“It fits perfectly into the buyer’s long-term estate plans,” he said.

Having a new landlord does not affect business operations for Marshalls, Mr. Herlihy said. The off-price apparel and home fashion retailer has a long-term lease in place.

The building, built in 1960, was converted from a bank before Borders moved in.

Long term, the new owner hopes eventually to “reposition the property to make it more architecturally appealing,” but not while the Marshalls lease is in effect, Mr. Herlihy said.

After struggling through several years of an anemic market, commercial real estate transactions in Santa Barbara started gaining traction last year.

Several key “trophy property” transactions, which bring hefty commissions to local brokers once the deals are done, were completed in 2012. Regency Centers sold the building where Whole Foods Market is located for $35 million.

Mr. Herlihy and Mr. Brown teamed up to broker the classic “Santa Barbara” style office building at State and De la Guerra streets, which sold to an investor for $11.2 million.

They also arranged for the sale of another chunk of serious Santa Barbara commercial real estate — the failed Chapala One condominium project, which sold for $21.8 million and is slated to be relaunched as Sevilla Santa Barbara condos.

The investment market in Santa Barbara is strong right now, with very little available inventory and with leasing and sales rates at pre-recession levels for prime real estate, Mr. Herlihy said.

Other major transactions — both leases and sales — are in the works for 2014, he said.