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 generated record volume for the second consecutive year; however, higher interest rates will slow sales momentum in 2023.
• Apartment sales brought record-high dollar volume and record-low cap rates, though greater pricing friction due to interest rates is expected this year.
• Offices offered for sublease doubled as tech tenants adapt to remote work. Traditional office vacancy is more stable, and achieved rents are as high as ever.
• Retail rents continue to appreciate as vacancy tightens everywhere except State Street. Local restaurants and retailers are driving the market.
• Robust industrial leasing activity brought vacancy to 1.7% and generated record consideration of $52 million, while pushing rents to new highs.