Radius Real Estate Forecast shows plateau in Santa Barbara housing rental rates, more vacancies in commercial space
SANTA BARBARA, Calif. – The forecast for commercial real estate in the near-future shows a plateau in some rental rates, a vacancy increase in large buildings, new housing ideas and more hotels.
The 14th annual Radius Real Estate and Economic Forecast took place at the Hilton Beachfront Resort with several experts hitting on each topic.
A Radius Commercial Sales and Leasing principal, Gene Deering, went deep into the changes in the Funk Zone underway with a new 250-room hotel in the planning stages on Garden St. and Yanonali along with an entire block at Gray Avenue going through a sale.
He also asked, "if the Funk Zone didn't exist, would some of those retailers have gone to State St.? And would State be in a better position, probably."
He also said, the changes underway at the State Street underpass between the waterfront to downtown is, "a great design and it will look cool when it's done but we're spending $11-million on it. If the city can't keep it clean and make it safe it doesn't matter how cool the design is, people aren't going to want to go down there."
The presentation also focused on two large new housing proposals at the Paseo Nuevo Mall and the La Cumbre Plaza, both in the early stages, but the biggest projects of their kind underway on the South Coast. Michael Lopus with Radius said, "we know the city council and the city wants that project so it will be 500 units, it's 85,000 square feet of retail space 96,000 feet of open space. There is a desire for that Paseo Nuevo area to change."
After a spike in the last couple of years, the forecast is for housing rental rates to plateau.
There were other hotel projects, including two in the heart of downtown and one on upper Chapala Street where a church was just purchased. It will be converted into a hotel project near the intersection of Mission Street.
When it comes to multiple unit housing projects, the presentation showed rising rental rates for now have plateaued.
The presenters said currently many cities along with the state overall are improving their landlord-tenant rules ranging from the size of deposits to reasons for evictions.
