The sale of 37 residential income properties near UCSB is the largest commercial or multifamily transaction of the year in Santa Barbara’s South Coast.
In what is by far the largest commercial or multifamily transaction in Santa Barbara’s South Coast this year, Radius Commercial Real Estate partner Steve Golis recently engineered the sale of 37 separate residential income properties located along the oceanfront community of Isla Vista adjacent to the University of California, Santa Barbara (UCSB).
The collection of single-family residences, duplexes, four-plexes and 5+ unit properties was listed at $79,024,950. The eventual purchase price was undisclosed.
The owner approached Golis with the task of listing the one-of-a-kind portfolio. The complex array of properties created a unique challenge in finding the perfect investor.
Golis, considered the market’s expert in multifamily investments, identified a local investor who ended up bringing in additional investors from out of state. Isla Vista has been and continues to be a very blue chip area attracting investors from all over.
Approximately 33 of the properties are located along the highly coveted Del Playa Drive, a stretch of mostly residential income properties within footsteps of the university. Del Playa rentals are typically the first in the area to book up given their proximity to the ocean. All the properties are considered high quality, pride-of-ownership assets. The new owners plan to continue to operate the rentals as student housing. All units are leased for the 2018-2019 academic year. UCSB is perennially ranked one of the top public universities in the country.
“We had many interested buyers which is a testament to the strength of multifamily investments in the current marketplace,” said Golis. Vacancy rates for rental properties in Isla Vista continue to sit below 2% given the popularity of the beachside community to renters and students in particular.
The transaction entered escrow in late December and closed May 1, and was complicated by the Thomas Fire and subsequent Montecito mudslides. “The closing of the freeway prevented the buyers and inspectors from traveling to Santa Barbara. Both sides agreed to fly the inspectors into Santa Barbara. This was certainly one of the most challenging escrows I have been involved in and we are very happy we got it completed for the seller and buyers.”
In addition to this portfolio, Golis also assisted the buyers in purchasing another 5-unit property from a different seller, with all sales closing at the same time.
Institution Ale co-owner Shaun Smith stands near his Santa Barbara brewery’s controversial neon sign. (Joshua Molina / …
Institution Ale's Ryan Smith and son Shaun Smith at the family's new State Street location. Photo: Paul …
Summary of market insights and analysis from Q2 2019 South Coast commercial sales and leasing activity: Download the complete report here …