Q3 2026 Market Report: Google Expands in Goleta as Central Coast Commercial Real Estate Remains Selective

Google’s $32.5 million acquisition of a commercial campus in Goleta was the largest South Coast commercial real estate sale in the third quarter of 2026. But the transaction also illustrates a defining characteristic of the current market: major investments continue, while overall sales activity remains selective and results vary significantly by property type and location.

According to Radius Commercial Real Estate’s Q3 2026 Quarterly CRE Market Report, South Coast sales totaled approximately $75 million across 17 transactions. Two sales accounted for 58% of that volume, and privately negotiated transactions represented 71%. Meanwhile, Goleta office rents reached a record high in Radius’s tracking history, Carpinteria’s reported office vacancy rose sharply, and downtown Santa Barbara continued to experience both storefront leasing activity and business closures.

Taken together, the findings show why headline transaction totals alone do not tell the full story of Central Coast commercial real estate. Property-level fundamentals, submarket conditions, financing costs and local economic factors continue to shape investment and leasing decisions.

South Coast Commercial Real Estate: Major Sales, Selective Investment

South Coast commercial real estate recorded 17 sales totaling $75,033,288 in Q3 2026, down from 23 transactions in Q3 2025. Google’s $32.5 million acquisition of 147–165 Castilian Drive in Goleta led the quarter. The approximately 83,400-square-foot campus brings Google’s reported local footprint to roughly 300,000 square feet. The company has not announced the intended use of the newly acquired buildings.

Kellogg Square, an established Goleta shopping center, sold for $11.3 million, making it the quarter’s second-largest transaction. Together, the Google acquisition and Kellogg Square sale represented approximately 58% of South Coast sales volume.

The concentration of dollar volume is important context. The remaining 15 transactions totaled approximately $31.2 million, showing that the quarter’s headline total was driven disproportionately by two major deals rather than a broad increase in sales activity.

Off-market transactions were another defining feature. Six privately negotiated sales totaled $52.9 million, or approximately 71% of South Coast volume. The figures highlight the importance of private buyer-seller relationships in a market where transactions can be limited in number and individual sale values vary substantially.

What do Q3 South Coast sales indicate? Investment capital remains active, but the transaction count and concentration of volume suggest a selective market rather than uniformly strengthening demand. Buyers continue to evaluate individual properties based on pricing, financing, income potential and investment objectives.

Goleta Office Rents Reach a Record as Carpinteria Vacancy Rises

Office market conditions diverged sharply between Goleta and Carpinteria during Q3 2026.

Goleta’s average gross achieved office rent reached $2.62 per square foot per month, the highest quarterly average in Radius’s tracking history. Rent growth that began in 2024 has continued, and the quarter’s largest office lease was Toyon’s commitment to 43,665 square feet in the former AppFolio building.

Carpinteria’s reported office vacancy rate, by contrast, reached 48.7%. Two vacant properties totaling approximately 162,000 square feet account for much of the increase. Together, the buildings represent roughly one-third of the area’s stated office inventory.

This concentration matters when interpreting vacancy data. A small number of large properties can substantially change a submarket’s reported rate, so the figure should be understood in the context of the inventory involved rather than as a uniform measure of conditions across every building.

What is happening in the South Coast office market? Goleta is experiencing record average achieved rents, while Carpinteria’s reported vacancy is heavily influenced by two large vacant properties. The contrast reinforces the need to evaluate office conditions by submarket, available inventory and individual building characteristics.

State Street Retail: Fewer Available Storefronts, Continued Business Challenges

Downtown Santa Barbara’s State Street corridor had 29 storefronts available for lease at the end of Q3, down from 31 in Q2. The count fell below 30 for the first time since 2019.

The decline in available storefronts suggests a changing supply of space, but it does not necessarily mean downtown business conditions have broadly improved. Four restaurant closures occurred during the quarter, and several businesses cited limited local customer traffic as a factor in their decisions to close.

At the same time, individual properties continued to attract new tenants and new uses. The quarter included leasing and opening activity involving Wear & Roam, State of Mind Café and Milio’s Pizza, demonstrating that activity continues even as other businesses face operating challenges.

The future of the corridor also remains a public-policy issue. The City adopted its State Street Master Plan, and a petition opposing the plan qualified for a voter referendum during Q3.

What does lower State Street storefront availability mean? The decrease is a useful measure of leasing availability, but it is not a complete measure of downtown economic health. Business closures, customer traffic, new tenant activity, redevelopment and the reuse of existing buildings all contribute to the corridor’s outlook.

Central Coast Multifamily Sales: Higher Capitalization Rates and Price Sensitivity

The Central Coast market for apartment properties containing five or more units recorded 20 sales in Q3 2026, totaling approximately $122 million and 382 units. That was an increase from nine sales totaling $31.7 million in Q2, but below Q3 2025, when 22 sales totaled $239 million. The year-earlier quarter included two large Ventura County institutional transactions totaling $183 million.

The average capitalization rate for Q3 multifamily sales was 5.59%, up from 4.95% a year earlier. Properties with published asking prices sold at an average of 93% of asking, indicating that negotiations between buyers and sellers remain relevant to completed transactions.

Smaller multifamily properties also showed pricing pressure. South Santa Barbara County recorded 12 sales of properties with two to four units, down from 23 in Q3 2025. Eleven of the 12 properties sold below their original asking prices, with an average discount of 13.3%.

Local regulation is another factor for investors to consider. The Santa Barbara City Council adopted its permanent Rent Stabilization Ordinance on October 6, 2026, by a 4–3 vote. As reported by Radius, the ordinance is set to take effect November 5, 2026, with actual rent limits applying starting January 1, 2027.

What do Q3 multifamily trends suggest? Sales activity rebounded from Q2, but higher average capitalization rates than a year earlier and discounts from original asking prices in the smaller-property segment point to continued attention to acquisition pricing, operating income and property-specific risk.

Commercial Real Estate Conditions Across Ventura and San Luis Obispo Counties

The broader Central Coast market also showed distinct conditions across counties and property types.

San Luis Obispo County commercial real estate recorded approximately $77.1 million in commercial property sales, led by the $58.25 million sale of Marigold Center in San Luis Obispo. Office vacancy stood at 3.4%, while industrial vacancy was 4.9%. Both sectors recorded negative trailing 12-month net absorption, indicating that occupied space had declined on a net basis over the period.

Ventura County commercial real estate continued to face elevated office vacancy. The rate reached 21.1%, up 130 basis points year over year. Quarterly net absorption was positive at approximately 19,000 square feet, although year-to-date net absorption remained negative at approximately 139,000 square feet. Ventura County’s market for apartment properties with five or more units recorded seven sales totaling approximately $93 million, including the $56.5 million sale of Clearwater at Riverpark in Oxnard.

North Santa Barbara County and the Santa Ynez Valley saw a mix of property transactions, industrial leasing, reinvestment and changes in property use. Examples included the opening of Spencer’s Fresh Markets in a former big-box retail space in Lompoc, continued hospitality repositioning in Santa Maria and additional commercial property activity in the Santa Ynez Valley.

These differences reinforce a central finding of the Q3 report: the Central Coast is not a single, uniform commercial real estate market. Sales volume, vacancy, rents and leasing demand must be understood in relation to the specific county, submarket and property type.

Q3 2026 Central Coast CRE Market: Key Findings

• South Coast sales: 17 transactions totaled approximately $75 million, down from 23 sales in Q3 2025.
• Google’s Goleta acquisition: The $32.5 million purchase added an approximately 83,400-square-foot campus and brought Google’s reported Goleta footprint to roughly 300,000 square feet.
• Off-market activity: Six privately negotiated sales totaled approximately $52.9 million, representing 71% of South Coast sales volume.
• Office rents and vacancy: Goleta’s average gross achieved office rent reached $2.62 per square foot per month, while Carpinteria’s reported office vacancy reached 48.7%.
• State Street retail: Available storefronts declined to 29, but restaurant closures and customer-traffic concerns continued to complicate the downtown outlook.
• Multifamily investment: Central Coast properties with five or more units recorded 20 sales totaling approximately $122 million, with an average capitalization rate of 5.59%.
• Regional differences: San Luis Obispo County, Ventura County and North Santa Barbara County continued to show distinct sales, vacancy and leasing conditions.

What the Q3 Results Mean for Central Coast Property Owners and Investors

The third quarter of 2026 illustrates a commercial real estate market where significant investments continue, but outcomes are uneven. Large transactions can drive quarterly sales totals, rent growth can coexist with substantial vacancy in another submarket, and declining storefront availability can occur alongside business closures.

For property owners and investors, these conditions make local market knowledge, realistic pricing, financing assumptions and property-specific analysis especially important. For tenants and landlords, achieved rents, available inventory and the characteristics of individual spaces provide more useful context than regional averages alone.

Radius Commercial Real Estate’s quarterly market reports provide original research and analysis of commercial property sales, leasing, office, industrial, retail and multifamily trends across Santa Barbara, Ventura and San Luis Obispo counties.

Download the complete Q3 2026 Central Coast CRE Market Report for detailed transaction data, market statistics and analysis.

Published by Radius Commercial Real Estate.