The former Saks Fifth Avenue building in downtown Santa Barbara that Amazon moved into at the start of the year is now up for sale at a price of $38.4 million.
Radius Group and CBRE are working together on the sale of 1001 State St., which is where Amazon has its Alexa research and development team. Amazon is currently leasing the building, and it has a 10-year lease through 2029.
When Amazon signed a lease and started moving in, the building underwent steep changes to convert it from the retail building it was to a place where tech research and development could happen. According to CBRE, there have been more than $20 million of capital improvements made to the building in the last 14 months, with Amazon investing about $14 million.
The property had a net operating income of roughly $1.8 million in its first year with Amazon as a tenant, and it’s expected to keep growing. The capitalization rate is the ratio of the net operating income to its property asset value. The first year, the property had a 4.57 percent cap rate, but Radius listed the building as having a 5.02 percent 10-year average cap rate.
Working backward from that information, it means the property is worth about $38.4 million, and that it’s being sold at its worth, with projections to keep rising in value. Amazon’s lease, according to the brochure Radius put out, is expected to increase about 2.5 percent every year.
The building has 42,689 square feet of space, and it sits on almost a full acre of land. The new owner would buy both the building and the land.
Austin Herlihy, an executive vice president with Radius, is working to represent the seller, along with Chris Parker, a senior associate with the group. Dan Riley, a senior vice president of CBRE, is also representing the seller, and he’s working with CBRE coworkers Austin Wolitarsky, a senior associate, and Simon Mattox, a vice president.
The sale is under a bit of secrecy, though. On the page with the 1001 State St. listing there’s a confidentiality agreement potential buyers are required to fill out.
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