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The Real Deal: Seemingly sunny SoCal

April 17, 2019

The resi markets outside LA County are largely holding steady as a tech giant is rumored to make a home in Santa Barbara

Santa Barbara, California – Published 4/17/2019
By Kavita Daswani
Former Saks store in Santa Barbara

A giant this way comes. In a move that is expected to re-energize the city of Santa Barbara’s main thoroughfare of State Street, the 48,000-square-foot former Saks Fifth Avenue store space will be occupied by “a Fortune 100 tech company,” said Austin Herlihy, executive vice president of Santa Barbara-based Radius Commercial Real Estate, which brokered the deal on behalf of the landlord. Several sources told local outlet Noozhawk that the tenant is Amazon.

“[The tenant] will transform the building, bringing in 200 jobs to State Street and giving the street a much-needed shot in the arm.” Herlihy told TRD.

And more housing is on the way for the city. At 634 Anacapa Street, a Spanish-style development comprising 30 units with 5,500 square foot of commercial space is underway. And at 414 Chapala Street, a mixed-use development will add 22 residential units and about 1,400 square feet of commercial space.

The residential market is plugging along in Santa Barbara County. Overall sales were up 5 percent from February 2018 to February 2019, according to the county recorder’s office. The median sales price was up 2.5 percent year-over-year, to $1.025 million in February 2019.

Stan Tabler, a realtor with Compass in Santa Barbara, said that the market in prime areas such as Montecito has “in general slowed down, but the market over $5 million is still active.” Tabler added that a number of houses affected by last year’s mudslides have yet to be rebuilt. Still, there have been some significant sales. In March, a 3.28-acre El Cielto property sold for $14.5 million to Bill Asher, co-chairman of adult film company Vivid Entertainment. In February, entrepreneurs Dwayne and Teresa Clark put down $18.12 million for a lavish Carpinteria spread.

Ventura County

Home sales in Ventura County were down year-over-year, in line with a wider trend around Southern California. In a report from CoreLogic, the Irvine-based housing industry research firm, 567 homes were sold in the county this past February, down from 644 over the same period a year prior. Prices, however, remained more or less steady with a county median home sale price at $565,000 for February.

On the multifamily real estate front, a 169-unit apartment complex in the beach city of Port Hueneme was sold for $37.35 million to a private investor, according to CBRE. Featuring a pool, spa and clubhouse, the Park Madera Apartments is set on more than five acres. In March, the average rent for an apartment in Port Hueneme was $2,181 per month, up 10.22 percent from the same time last year, according to market research firm Rainmaker Insights.

Over in Oxnard, plans have yet to be finalized for a 107-acre piece of farmland. Approvals are in the process of converting the land into an “urban village,” with between 460 and 790 residential units, commercial property, pedestrian-friendly streets and a high school, according to the Ventura County Star. The project is a co-development of the Oxnard-based Maulhardt Family Trust, the city of Oxnard and the Oxnard Union High School District.

And in Thousand Oaks, Agora Realty & Management acquired a 33,700-square-foot shopping center for $14.4 million. The Office Depot Plaza is almost fully occupied by tenants, including an Office Depot, two banks and the Habit restaurant. Agora intends to upgrade the property with enhancements to its parking areas and landscaping.

Orange County

At the end of 2018, the retail leasing market in Orange County saw year-over-year improvements in average asking rates, vacancy and net absorption, according to reports from CBRE. Much of this was driven by a scarcity of large spaces.

In late March, At Home, a Plano, Texas-based big box discount furniture chain, opened an 85,000-square-foot store in Foothill Ranch, its first in California. The company expects to roll out about 80 locations across California by the end of the year.

Los Angeles-based George Smith Partners, which specializes in arranging financing for commercial and multifamily properties, announced in March that it had financed $101.3 million in non-recourse bridge debt for a 375,000-square-foot, 37-acre, open-air regional shopping center in La Habra. The financing package will also fund improvements for the 16-screen Regal Cinema on the site.

But on the residential side, deal volume is slowing. According to CoreLogic, there were 1,903 homes sold in the O.C. in February 2019, down 17.1 percent from the previous year. The median sales price, at $700,000, was on par with last year’s $710,000.

San Diego County

The resi market is a mixed bag in San Diego County, where much-needed inventory is up 20 percent from last year, but the number of transactions is down. There were 1,246 homes sold in February, compared with 1,434 the same month in 2018. The median sales price of a single-family home in February was $630,000, a 3.1 percent uptick over the same period a year earlier, according to a report from the San Diego Association of Realtors (SDAR).

“The housing market has proven to be resilient despite predictions of a tougher year for the industry,” said SDAR president Kevin Burke.

The development of a number of master-planned communities is underway across the county. In February, Lennar Homes of California, one of the region’s largest home builders, acquired a 29.93-acre plot for $52.14 million in the San Diego suburb of Rancho Peñasquitos, where the company is planning to build 324 homes. The project is expected to be completed by the end of 2020.

March saw the opening of 96,000 square feet of retail and restaurant space at One Paseo in Carmel Valley. The 23-acre spread also includes 608 residential units and two office buildings, which will open later this year and next year, respectively. John Kilroy, chairman of developer Kilroy Realty, told the San Diego Union-Tribune in early March that One Paseo will “transform this area.” Tenants in place include clothing brand Faherty, Blue Bottle Coffee and casual eatery Tender Greens.

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