Radius Commercial Real Estate gave up trying to predict where the market was going to go next when it released its third quarter market report for the Santa Barbara area.
“We might liken 2020 to a roller coaster none of us ever want to ride again,” the report said.
The third quarter of 2020 was surprisingly close to the third quarter of 2019, despite vastly different circumstances: There were 23 closings for a total of $115 million in volume this year, compared to 27 transactions with $146 million in volume in 2019.
Even still, the disastrous second quarter has had an effect. By this time in 2019, the area had 58 sales with a volume of $320 million. So far his year, there have been 47 total sales, for a volume of $169 million—a drop of more than 47%.
There are some interesting patterns emerging from this year’s sales. Almost two-thirds of the sales this year have been to owner-users, including more than half the sales in the third quarter. Additionally, about one-third of sales have been for properties that were not listed at the time they sold.
Santa Barbra also saw its highest office vacancy rate in the quarter since 2003. There have been a lot of office properties that have come to market, but there hasn’t yet been a significant change in leasing rates. The average gross asking price continues to hovering around $3.12 per square foot.
The report finished by taking a look at State Street, where vacancy rates have ticked upwards this quarter, going from 13.25% in Q2 to 16.87% in Q3. Radius expressed hopes that the new apartments that will be built in the parking lot of the former Staples store will inject new life into the downtown corridor.
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