South Coast Sees Commercial Sales Soar in Second Quarter of 2022
$104M QAD Campus Deal Was the Top Sale in a Quarter That Also Saw Several State Street Vacancies Filled
Radius Commercial Real Estate observed strong commercial activity in its South Coast Market Report for the second quarter of 2022, marking 41 total sales with $254 million in volume. Highlights from the quarter include sales in trophy properties, hotels, and more State Street trading deals.
State Street in downtown Santa Barbara welcomed three new properties: Taza Mediterranean, Zoe Bikinis, and Vuori. Two more sales also closed at 1019 and 1027 State Street. According to the report, the number of sales was a rare occurrence and marked as an indication of legacy owners taking advantage of the market. The decreasing vacancies and other notable trends, such as growing e-bike traffic, can be attributed to the positive effects of the partial street closure downtown, said the report.
The report also noted a strong demand for multifamily properties in Santa Barbara South County, with sales closing on three investment properties with five or more units in size. In Isla Vista, the 22-unit student housing complex located at 6587 Cervantes Road and 759 Embarcadero del Mar sold for $9.8 million. At 2024 Anacapa Street, a nine-unit property, which was once used as a school auditorium, sold for $4 million. The third sale occurred at 111 North La Cumbre, where a 17-unit building sold for $6.85 million.
The largest commercial sale of the quarter was the QAD Campus at 100-101 Innovation Place in Summerland. The 122,925-square-foot office complex sold for $104 million.
While the report notes the company is on pace for reaching its average of 80 sales per year, there is still some uncertainty for the second half of 2022 as quick changing interest rates, rising construction costs, and a significant drop in the stock market have led to an overall negative economic outlook. Radius expects a slight increase in inventory and an adjustment in asking prices for the remainder of the year as sellers take advantage of the market.
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