Carpinteria industrial leases are on fire, Santa Barbara’s Funk Zone remains strong, Silicon Valley is pumping up South Coast real estate volume, and tech, beer and coworking spaces are beginning to revitalize a struggling State Street.
Those were the underlining themes of the 12th annual Radius Real Estate & Economic Forecast held Nov. 19 at the Hilton Beachfront Resort.
On the South Coast, commercial sales stayed consistent to last year in terms of production, but saw a big spike in dollar value, up 73 percent from 2018 to $320 million, according to Paul Gamberdella, principal with Radius Commercial Real Estate.
Another variable Gamberdella said to pay attention to is the South Coast weed industry and the “cannabis effect.” According to Gamberdella, as supply increases and the price for cannabis goes down, price per acre on land to grow the pot is going up.
Gamberdella predicted next year should be “steady as she goes” in terms of commercial sales, with sales volume back at 2018 levels.
Commercial leasing on the South Coast has relatively remained the same the last few years, with small variations happening in sales, retail and industrial. Procore leads the way in Carpinteria, which “remains incredibly hot for industrial leasing,” Gene Deering, principal with Radius, said.
Santa Barbara isn’t too far behind in industrial leases, sitting at just a 1.1 percent vacancy rate compared to Carpinteria’s 0.2 percent. Goleta, which currently has a 6.2 percent vacancy rate, should see its industrial leases on the rise, due to such high demand in Santa Barbara and Carpinteria, Deering said.
The Funk Zone remains the shining star in downtown Santa Barbara, and should continue as such, as the area expects to add a 200-plus room hotel in the next few years.
Even State Street, which has been sort of a black eye to downtown as of recently, is starting to see a revival, Deering said. He added that tech companies like Invoca and Honey have helped populate the area with foot traffic, and co-working spaces like Kiva, formerly Impact Hub, are also contributing to the revitalization.
Another factor breathing new life into downtown is Santa Barbara’s budding beer scene. After eluding the city’s notoriously strict signage regulations, Institution Ale Co. plans on expanding its operations in the 500 block of State Street with a neighboring outdoor beer garden.
Additionally, one block north in the 600 block, M. Special Brewing Co. out of Goleta plans on opening a second location at the vacant Tonic nightclub on State Street, Deering said.
He included in his forecast an all-important update on the vacant Macy’s space, which served as an anchor to the Paseo Nuevo mall. Deering said a potential developer was looking at three tenants to occupy the building’s first floor.
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