The building at 3757 State St. in Santa Barbara recently sold for just under $10 million as part of a 1031 exchange. (courtesy photo)

The building anchored by Citibank at 3757 State St. in Santa Barbara has been sold for just shy of $10 million, marking the largest sale of an office property on upper State Street since 2005, according to brokers behind the deal. The buyer and seller were not disclosed.

The 20,000-square-foot building, which retains a long-term lease with Citibank and is 100 percent occupied, underwent an extensive remodel in 2012, according to Radius Commercial Real Estate & Investments. The property is located next to Whole Foods Market.

“As a part of a 1031 exchange, the buyer was able to acquire the highest quality office building on upper State Street, fully leased to quality tenants,” Gene Deering of Radius, who represented the buyer in deal negotiations, said in a statement. “With dramatic mountain views, five-per-thousand parking, and Whole Foods across the parking lot, the tenant experience is hard to beat anywhere in Santa Barbara.”

Radius brokers Bob Tuler and Paul Gamberdella represented the seller.

The 2012 remodel, the first update on the property since the ‘70s, included a full renovation of the second and third floors of the building, Radius said. The property had suffered from unstable tenancy during the years, but following the renovations, Citibank extended its ground-floor retail lease and multiple tenants took offices on the second and third floors.

Radius noted that so-called 1031 exchanges, in which commercial property owners defer capital gains taxes by buying and selling similar buildings, are becoming an increasingly common tactic for investors. The sale of the Marshalls-occupied building at 900 State St. in downtown Santa Barbara and the February sale of the historic Bekins building in the city’s Funk Zone were also 1031 exchanges, noted Radius, which represented parties in both of those deals.