“Since none of us have lived through a crisis that included both a pandemic and stock market meltdown, it is difficult if not impossible to predict the direction of the market,” the report noted.
The uncertainty is reflected in the volume of the first quarter.
From January to March, there were 15 commercial sales on the South Coast, the same total as in the previous two years, but the amount those sales totaled was a severe decline from 2019 and 2018. Where Q1 2020 produced $39.2 million in sales, Q1 2019 had $104 million, and Q1 2018 had $210.6 million.
There were also a few multifamily sales, including a $73.7 million sale of two student housing complexes in Isla Vista. The complexes sold for approximately $495,000 per unit, which is a 30 percent increase over its price three years ago. The two complexes have a total of 149 units between them, and the sale completed just before UC Santa Barbara shut down. Rent collections are hovering around 80-90 percent, even with the overwhelming majority of students home, but there is some question over whether UCSB will be able to open for the fall — and if not, what that might mean for student housing.
The group wrote that even during the current health crisis, the economy is still going on, with businesses shifting to meet needs like creating masks and offering takeout. The report pointed to everyone being in uncertain waters, and advised landlords to be open and honest during hard conversations with tenants. Radius Group also advised landlords to be creative, and to come up with plans which will allow tenants to pay back any outstanding rent when eviction bans are withdrawn.
The group also wrote that there is still money out there for those who want to invest in multifamily deals.
“Local banks want to keep their relationship clients happy and are doing their best to extend credit to strong clients at numbers that aren’t too far off from before the pandemic,” the group wrote.
Rental apartment availability is higher than usual in Santa Barbara. (Brooke Holland / Noozhawk photo) For one of …
Santa Barbara Independent: Brian Johnson: Santa Barbara’s Multifamily Housing Market Returning to Normal
Brian Johnson, Managing Director, Radius Commercial Real Estate; President, Santa Barbara Association of Realtors Strong demand for apartments …
Retail vacancies on downtown Santa Barbara’s State Street increased to 19.3% at the end of 2020, from …