Local investor pays $11 million for State Street building

A Santa Barbara investor who owns other commercial property in town paid more than $11 million for the four-story building at 740 State St., the News-Press has learned.

“It’s a trophy property at the 50-yard line” of downtown’s central business district, said Austin Herlihy of Radius Group Commercial Real Estate & Investments, who brokered the deal with Radius principal Steve Brown on behalf of both the local seller – Atlantico Inc. and buyer – Ray Mahboob.

“It’s a pretty significant transaction,” said Mr. Herlihy of Mr. Mahboob’s well-situated investment.

In terms of foot traffic, the corner of State and De La Guerra streets is smack-dab in the middle of the heavily-trafficked State Street corridor and highly prized by tenants, said Mr. Herlihy of the off-market deal that was quietly shopped to potential buyers.

Providing financing to the buyer on the deal, which closed at a little over $11.2 million, was Business First Bank.

The building – which is anchored by lines-out-the door frozen yogurt purveyor Pinkberry – is now fully leased, said Mr. Herlihy, adding the Radius team helped ink four new leases in the past 60 days.

Joining the tenant mix in the next few months will be Lululemon, Truong & Co. Jewelers, a high-tech consulting firm and a custom cabinetmaker/interior designer.

Other tenants leasing space in the 25,000-square-foot structure include the Salt Cave, the city attorney’s office and a hedge fund.

Having Lululemon on State Street will be a strong attractor for other retailers, said Mr. Herlihy.

The seller of athletic clothes for yoga, running and working out is one of the nation’s “hot” retailers. Analysts estimate its sales per-square-foot puts the company in the number three spot of popular retailers – right behind Apple (No. 1) and Tiffany (No. 2).

Among Mr. Mahboob’s other holdings downtown is the building at 424 State St. which is anchored by his tenant, the 99 Cents Only store.

The 740 State St. building sale caps a busy couple of months for the Herlihy-Brown team, which most recently arranged for the sale of the failed Chapala One project in downtown Santa Barbara.

In a deal that closed Nov. 14, Sevilla Associates LLC, a division of Los Angeles-based Woodridge Capital Partners, purchased Chapala One from Seattle-based Washington Capital Management.

The price was not disclosed and has not yet been recorded in public documents at the Santa Barbara County assessor’s office.

After repair work and other upgrades, new owner Michael Rosenfield intends to put the 46 units back on the market as condos.