Tuesday, March 11, 2008

Santa Barbara Commercial Property Update

I had the privilege of attending the Goleta Valley Chamber of Commerce Issues & Policy Round table today.
The topic was Local Commercial Real Estate Trends. The speaker was Mark Mattingly of Pacifica Commercial Realty.

Mark did a very good job of reviewing the number for 2007 and putting them in to perspective. Some of his comments outlined how the vacancy rates we have here locally are some of the lowest in the State. He also spoke about how the lease rates have continued to rise.

Much was made of the impact of UCSB and it's technology spin offs. It was made very evident from Mark's comments and some of the guests that UCSB is a hot bed of technology and those new technologies often spawn new local companies that outgrow their spaces quite quickly.

Another comment that Mark made was as the defense industry shrank here locally it had just the opposite affect on local businesses. Many people from that industry created companies using some of the same technologies that had been created for the government.

All of Mark's presentation focused on the commercial market and did not mention retail. There were some comments from some of the guests regarding how retail seemed to be shrinking. The responses seemed to think this was related to the credit crunch our country is experiencing.

Mark ended his presentation by saying he thinks it will be a pretty good year for commercial real estate here on the south coast. I'm going to post some statistics below that Mark shared with all of us.

See You In Escrow!

4th Quarter Office R&D Vacancy Rates

Carpinteria 5%
Goleta 3.3%
Santa Barbara 2.4%

R&D/Office Lease Rates 4th Quarter 2007 (asking price)

Carpinteria $1.49 gross
Goleta $1.74 gross
Santa Barbara $2.65 gross

4th Quarter Industrial Vacancy Rates

Carpinteria 2.7%
Goleta 4.0%
Santa Barbara .04%

Industrial Least Rates 4th Quarter 2007 (asking price)

Carpinteria $1.40 gross
Goleta $1.33 gross
Santa Barbara $1.37 gross


Mike Walker said...

Greg - What's your take on the latest foreclosure numbers and how and if it will affect th SB market.


Greg Knowles said...

Mike, one thing I am sure of is Real Estate is more local than ever. A perfect example is the terrible time people are having in Santa Maria and Lompoc regarding foreclosures. The south coast has been pretty resilient only accounting for about 10% of the counties foreclosures. The numbers I'm looking at show that in the county we are in a small valley regarding the number of loans adjusting. That number begins to rise again in May June and July. It isn't any higher than in some of the previous months though. I think we are at the beginning of the worst part of this cycle. I think it will play itself out close to the end of the summer and the south coast will most likely be pretty immune from any real serious trouble. The North County is still another issue all together. I think the issue is confidence. When you start seeing investors buying properties again you will see things getting better. Thanks for asking.