Sales in commercial real estate posted increases in Santa Barbara County during the third quarter, while commercial leasing experienced a decline.
Commercial Realtors who released their third-quarter summaries from the summer months said the results were about what they had expected or hoped for.
Some smaller businesses may be realizing that buying a property is cheaper than leasing, said Michael Martz, a partner with Hayes Commercial Group.
“The biggest news for the third quarter was the increase in sales volume for commercial properties, which is essentially recovered to pre-recession volume,” Martz said. “Which is a good sign in our view. Favorable lending conditions have played a part in that.”
Hayes reports that commercial-sales activity increased significantly last quarter, producing 22 transactions — the second-highest quarterly total in the last five years.
Leasing of retail property has been expanding on the South Coast this year, creating a 24 percent decrease in available space.
Martz said it seems buyers are being more aggressive, stepping off the sidelines to join sellers even though the inventory is still lower than demand.
“The good news for businesses in our community is that it’s provided a lot of opportunity … to purchase a building,” Martz said. “It’s a signal of a more healthy market.
“It’s just taken some time. The recession affected a lot of people from a financial standpoint. Commercial real estate has always been a great investment strategy. The real challenge has been finding properties for sale.”
Pacifica Commercial Realty reports a modest improvement in industrial-sector occupancy, noting the vacancy rate fell in both the Goleta and Carpinteria markets, while remaining the same in Santa Barbara.
“Industrial properties continue to be in constant demand in the city, but the anemic supply of space remains, which will keep leasing activity to a minimum for the near future,” said Mark Mattingly, executive vice president of Pacifica, which also has an office in Santa Maria.
Mattingly said the big story of the third quarter for the whole county is the slow leasing activity.
“Commercial leasing activity has slowed down,” he said. “It’s a function that the economy is going down.”
Mattingly said he doesn’t expect many large lease transactions to occur during the final quarter.
How retailers fare this holiday shopping season could speak a lot to the future of commercial real estate market, Martz said.
“It’s a huge driver in the retail world. If we have a good healthy holiday season … I think that will position things well for 2013,” Martz said. “On the flip side, if we have a flat or downward trend in retail sales for the holidays, that will probably mean we’ll be bouncing around in 2013. We’re all hopeful that the commercial real estate sector will be able to gain steam. We’re all holding our breath for the holiday season.”