California Commercial Real Estate Continues Upward

As many know, multi-family (5+ units = commercial) has been the darling of the commercial real estate boom for the past 2 years and is still on a steady demand path, especially in areas like Santa Barbara County where the ability to build new buildings is minimal. In an economic downturn, the office sector is the first to go and the last to recover when the economy gets better. We have seen significant office sales in Goleta, Santa Barbara and Carpinteria over the past 18 months, which indicates this sector is an interest to investors again and thriving. Low interest rates and capitalization rates (“cap rates”) will continue to drive the market demand and many think this will last a few more years. However, time is of the essence, as with all real estate deals, and now is the time to sell your property if that is something that interests you. Sale prices have increased approx. 25% over the last 18 months in SB County and premier properties that are in a good location have received several offers over asking price. Investing in this area is hard for many but owner-users can benefit immensely from SBA financing to fund the majority of their purchase when occupying at least 51% of the building. It will be interesting to see how the next couple of years play out but for now, the trend is positive and a lot of #cre deals are being done. Leasing has slowed down a bit as prices haven’t dropped as much as some would like. On the contrary, prices are slowly creeping up again, especially as owners decide to upgrade their spaces to attract more high-end, quality tenants. As always, if you have any questions about the current state of the #cre market in Santa Barbara County, please call or e-mail me.

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