While many Santa Barbara commercial real estate markets gradually improved through the first quarter of 2012, there’s an abundance of midsize office space, according to Pacifica Commercial Realty’s first quarter report.
Santa Barbara professional office space has reached a five-year high of 5.8 percent vacancy, which may increase if the Union Bank and Santa Barbara Bank & Trust merger goes through, Pacifica Vice President Mark Mattingly said. SBB&T is rebranding and it’s uncertain whether it will retain all of its downtown Santa Barbara and Goleta locations.
“What I think is interesting is the increasing number of vacant office space in downtown Santa Barbara, which has always been solid, and typically had a low vacancy rate,” said Mattingly, adding that there are several spaces between 4,000 and 10,000 square feet. “There’s more space than demand, and does that tell you there’s softness in financial services or the professional service sector? Maybe.”
The Goleta office market improved slightly as the vacancy rate decreased from 10 percent to 9.7 percent and medical company ConMed moved into Network Hardware Resale’s former 15,000-square-foot space at 26 Castilian Drive.
“The tech sector is our economic engine here on the South Coast,” Mattingly said. “When we see the tech sector improving, it bodes well for businesses in our community.”
Pacific Operators Offshore leased 11,600 square feet at 1145 Eugenia Place, and the Carpinteria office market vacancy rated dropped from 20.9 percent to 15.7 percent. The 24,000-square-foot location that Microsoft formerly occupied is the largest vacant space on the market.
The Carpinteria industrial market vacancy rate dropped from 8.4 percent to 4.7 percent as NuSil Silicone Technology moved into a 46,000-square-foot space on Cindy Lane. Santa Barbara’s industrial market remained strong at a 0.8 percent vacancy rate while the Goleta industrial vacancy rate increased from 4.2 percent to 5 percent.
Santa Barbara can expect continued slow growth, Mattingly said.
“Pretty much every sector of commercial real estate is slowly recovering from the worst drubbing most of us can remember,” he said.