Santa Barbara has miles of sandy beaches, trendy main streets from Carpinteria to Downtown Santa Barbara, and a thriving outdoor lifestyle. Tourists and locals flock to the area to take advantage of great weather, good surf breaks, and vineyards. It also includes a strong aerospace and defense-related employment sector supported by Vandenberg Air Force Base. Raytheon, for instance, has a significant presence in Goleta. The local universities provide a pipeline of well-educated employees for local employers and a consistent consumer base.
The availability rate is 3.1% during the second quarter. That is trending near the lowest level in the past 15 years. Net absorption has been positive for nearly every quarter since the start of 2023, with a tally of 79,000 SF during the past 12 months.
Single-tenant availability has risen above 2% from a 10-year nadir of 1% in 2022. Conversely, multi-tenant availability is trending at a 10-year low of 4% during the second quarter. Leasing volume has held relatively consistent at roughly 70,000 SF quarterly in the past year, which is line with the average between 2021 and 2022.
Like many areas of coastal California, development can be difficult. The pipeline has roughly 35,000 SF under construction, most of which is available for lease.
Rents have shifted by 2.4% in the past 12 months and by 15.1% in the past five years. Rent growth is expected to outpace the historical benchmark in the coming quarters.
Comments