The recessionary drought seems to be definitely over for commercial real estate as a year-end report from the Radius Group counts a whopping 103 sales along the South Coast in 2014 totaling nearly half-a-billion dollars. And the trend appears to be continuing.
The 17-year analysis by the commercial real estate group shows sales going up since 2011, when 71 properties sold compared to 35 the year before, which was a recessionary low. The past year “crushed” that streak, Radius states. Transactions included several large 1031 exchanges — real-estate swaps to defer capital gains or losses — but “investor confidence” played a strong part in the peak and also “banks doing loans at or near historically low interest rates.”
Among the notable sales were the Jack in the Box on upper State Street, which sold for more that $1,580 per square foot, or about $2.5 million. Relais de Paris (or the former Ruby’s Café, for old timers) went for $1,160 per square foot, or about $4.6 million. Out in Montecito, the 1187 Coast Village Road off-market deal for $13 million by Hayes Commercial was the third largest in that area’s history.
Some very large properties currently in escrow indicate the commercial real estate rebound continues, with a strong pool of buyers in the market and more large properties expected to come up for sale soon. And though prices have softened in New York and Los Angeles, Radius cites a Bloomberg report that attributes that to the wild fluctuations in oil prices and the rising value of the dollar.
In Santa Barbara, the year-end report surmises, fewer foreign buyers are interested and are relatively limited in number. Radius does expect sales to level off eventually closer to the 17-year average of 64 transactions per year.