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Wednesday, December 12 , 2018, 9:35 pm | Fair 48º


Pacifica Commercial Realty Reports Quarterly Slowdown in Santa Barbara Market

But Vice President Mark Mattingly foresees a turning point, with several significant deals in the works

Like the national economy, the Santa Barbara commercial real estate market has slowed to a crawl, according to Pacifica Commercial Realty’s third-quarter report.

“This past quarter we have seen the economy hit the brakes,” Pacifica Vice President Mark Mattingly said. “There have been very few transactions, either sales or leases. The good news is that we see several significant deals in progress with anticipated closings in the fourth quarter.”

He added that the third quarter is traditionally slow.

“It tends to be kind of slow — you’re talking about July, August and September, two of which are huge vacation months,” Mattingly said. “You can’t underestimate that the market slows down during the summer.”

Vacancy rates increased in both office and industrial sectors in Santa Barbara and Goleta, driving down asking rates. Mattingly said deals are taking longer, and there is more corporate scrutiny and investor uncertainty.

“You read about in the paper how corporations are sitting on large cash reserves and waiting for improvement in the economy before spending money,” he said. “There’s just more scrutiny of capital expenditures.”

The Santa Barbara office market vacancy rate ticked back up to 4.9 percent, up 0.2 percent, as did Goleta, which rose to 4.7 percent. But fourth-quarter activity should be anchored by Goleta’s technology sector, and Deckers Outdoor Corp.‘s move to the Cabrillo Business Park, which may go through by the end of the year, according to Mattingly. The Carpinteria office market vacancy increased from 17.4 percent to 18.7 percent.

It’s still difficulty to find any available space for industries in the Santa Barbara market, although the vacancy rose from 1 percent to 1.3 percent this quarter. The Goleta industrial market didn’t have any activity as the vacancy rate increased from 4.5 percent to 4.7 percent. But that wasn’t the case in the Carpinteria industrial market, where vacancy rates decreased from 11 percent to 9.1 percent.

Although economists expect slow growth in all sectors until 2014, the indicators don’t point to a double-dip recession, California Economic Forecast Director Mark Schniepp said at the Radius Group Economic Forecast in September.

“We don’t see a double-dip recession,” Schniepp said. “We don’t think the housing market can go any lower. In fact, it’s the housing market that will gradually help to get us out of this mess. We’ll see a very gradual recovery of the labor markets — you may become convinced by 2013.”

Noozhawk business writer Alex Kacik can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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