Quarterly review and forecast covering leasing and sales of commercial real estate – including office, industrial, and retail – for the South Coast of Santa Barbara County.

Highlights:

• Commercial sales activity decelerated in Q3, but is still on pace for record transactions and volume for the year.
• Rising interest rates, along with other economic factors, are complicating underwriting and increasing pricing friction in the sales market.
• As office tenants grapple with remote work, inventory has been expanding, met by modest demand and leasing activity. Gross absorption is down 36% compared to the 5-year average.
• Retail leasing has kept pace with recent historical levels, and average rents have seen a modest bump.
• Strong industrial leasing has produced YTD dollar consideration twice the prior 5-year average.