Office Property Breaks Pricing Records

CARPINTERIA, CA—Montana Avenue Capital Partners have acquired an oceanfront office campus in Carpinteria, CA, a suburb near Santa Barbara. The sales price was not disclosed; however, sources close to the deal say that the property was listed at $32.5 million and the final sales price is the highest ever paid for a property in the submarket.

“Sales of high value office properties in the Santa Barbara area have increased markedly during the past three years,” Francois DeJohn, a broker at Hayes Commercial, tells GlobeSt.com. “Existing demand by local investors has been supplemented by national investors expanding their scope for quality triple-net-leased assets beyond the major urban markets.” DeJohn represented the buyer and the seller in the transaction, along with his colleague Steve Hayes.

Located at 6303-6309 Carpinteria Ave., the three-building property is 118,394 square feet and is leased by CK Restaurant Holdings and Procore Technologies, with 46,000 square feet remaining of vacant space. Hayes Commercial has also been hired to lease up the remainder of the property. To drive tenants to the property, the buyer plans to renovate the exterior and interior of the vacant space, adding indoor-outdoor collaborative space and patio areas, glass roll-up doors, new signage and architectural features, EV charging stations, and exposing existing 15 foot ceiling heights to give the property a more creative feel.

According to Hayes, activity in the market is picking up, and he expects the market's vacancy to be cut in half next year. This is, of course, attracting new investors, business expansion and putting upward pressure on pricing. “Although a small market compared to urban centers like Los Angeles or the Bay Area, Santa Barbara has heavy constraints on new development, a strong tech and engineering sector, and relatively low commercial vacancy rates that have caught the attention of outside investment groups,” Hayes, of Hayes Commercial, tells GlobeSt.com.