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Business

Outdoor Gear Retailer REI Secures State Street Lease

Commercial real estate professionals say the store, set to open next fall, will boost business in the area

Outdoor gear supplier REI has secured its lease at 314 State St. in Santa Barbara and will open in the fall of 2011, Radius Group General Manager Brian Johnson told Noozhawk on Wednesday.

The store will front Anacapa Street and reposition the building so the area is more attractive to soft-good retailers and restaurants, Johnson said.

“It will attract a mix of local and national tenants because that’s the first point you see coming from the beach, and REI signs will be visible from the freeway,” he said. “It will be a bit of a beacon for tourists and locals, and do a lot for that block.”

Commercial vacancy rates in Santa Barbara sit at 2.4 percent, which is up from the winter 2008 rate of 1.1 percent, but Johnson said many cities are far worse off than Santa Barbara.

“We’ve seen a very nice turn around on State Street,” he said, adding that there was a 40 percent increase in activity compared with 2009.

Radius Group partner Gene Deering said REI’s move to State Street will have a similar effect that the Old Navy and Apple stores had on foot traffic.

“With REI opening up there, it will draw traffic to lower State, to go along with the new restaurant on State and Gutierrez,” said Deering, who confirmed that the Santa Barbara Shellfish Co. will add a restaurant next to the Seattle-based retailer. “It will be nice because the 400 and 500 blocks will be direct beneficiaries.”

As far as lease rates go, it’s likely to remain a tenants’ market for some time. Rents may firm up in the prime 800 and 900 blocks, but Robinson said there are still opportunities to make a good deal.

“I’ve seen rates take a nice dip and may stabilize; it’s still a good tenants’ market,” he said. “Landlords are looking to make deals and be realistic. I’ve seen more landlords willing to take a chance.”

Radius Group partner Bob Tuler referred to a client who just renewed a lease on the 1000 block of State Street and said his business had seen a 30 percent increase recently.

“I don’t often hear that retail businesses are getting worse; sometimes you hear it isn’t getting better,” Tuler said, “but I think retailers are staying the same or improving.”

The REI location, with more than 24,500 square feet of space, will offer products for outdoor activities such as camping, climbing, cycling, fitness, hiking, paddling, snow sports and travel. It will also provide a bike shop for assembly and repairs, a gear rental department and a community space where nonprofits and outdoor organizations can hold classes and events, according to a company news release.

“We want to provide families and those who love the outdoors with the advice, education and products they need to enjoy the outdoors comfortably and easily,” Greg Mellinger, REI retail director for Southern California, said in the news release. “This announcement reflects our commitment to expanding our presence in Southern California and offering our members and customers more ways to get outside.”

REI plans to hire 40 to 50 employees for the new Santa Barbara store. The company says it recruits candidates who share a passion for the outdoors and quality customer service. Click here for more information about employment opportunities.

Noozhawk intern Alex Kacik is a graduate of Cal Poly, San Luis Obispo. He can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk or @NoozhawkNews. Become a fan of Noozhawk on Facebook.

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