Smarter Utility

 

TMCNet: Santa Barbara News-Press, Calif., Real Deals column

[December 31, 2008]

Santa Barbara News-Press, Calif., Real Deals column

(Santa Barbara News-Press (CA) Via Acquire Media NewsEdge) Dec. 31--Two long-time Santa Barbarans could only shake their heads in collective wonderment Tuesday at the tsunami that hit the commercial real estate/retail sector after September on the South Coast -- and what might be in store for 2009.


Steve Hayes and Francois DeJohn of Hayes Commercial crunched the numbers, then talked to Real Deals with amazement at their figures for 2008, compared with 2007:

--Total sales and lease volume down 22 percent.

--Vacancies up 54 percent.

--Sublease space (where companies cut back on expansion or downsize) up a whopping 124 percent.

--Available office space up 86 percent.

And those are the good numbers.

"We're expecting many more store closures," said Mr. DeJohn, a Santa Barbara resident and commercial real estate veteran for 17 years here. "Some of these stores on State Street just want to get through Christmas and then close their doors. The party is over and now the pain and suffering begins."

Mr. Hayes, who has called Santa Barbara home for 27 years, won't blow smoke at ya, either. "The mom & pops will be going out of business. Things won't begin to turn around at least until a year from now."

"We will have a significant downturn," added Mr. DeJohn. "I expect the worst."

So what are Hayes Commercial's really bad numbers?

--Commercial real estate sales are down 7 percent.

--Sales volume is down 61 percent.

--Available retail space is up 8 percent; vacancy is up to 1.6 percent.

--Available space in the industrial market is up 23 percent.

"All of 2009 will look like the fourth quarter of 2008," said Mr. DeJohn.

"We won't begin to see a recovery until 2010."

Mr. DeJohn did note that he hasn't seen many distressed sellers of commercial properties on the South Coast, and Mr. Hayes added that there are opportunity buyers out there. Also, Hayes Commercial is doing more renewal leases for its clients. "There's always activity," Mr. DeJohn said. "Leasing accounts for more than half (of our operations)."

The personnel plying the commercial real estate trade also will realize a fallout, if it hasn't already. "Very few people are looking to buy property now and there weren't that many brokers here (to begin with)," said Mr. Hayes.

"There's the A team, the B team and the C team," chimed in Mr. DeJohn. "The C team will have a tough time."

NORTH COUNTY: Mattei's Tavern Hotel in Los Olivos is seeking to build out the cottage-style hotel with a total addition of 61,802 square feet. The build out would include two-story, four-bedroom cottages; two-story, three-bedroom cottages; and a one-story, one-bedroom cottage. A new backhouse featuring a spa, gym and lockers is also proposed. As evidenced by letters received by the News-Press, the proposed expansion looks like it will be a contentious issue ... Santa Maria-based VTC Enterprises has awarded construction contracts for an 18,260-square- foot building at A Street and McCoy Lane, Santa Maria, that will replace two buildings constructed more than 60 years ago.

TRANSACTIONS: Hayes Commercial: The Kelt Group leased 3,425 square feet of office space at 2050 Alameda Padre Serra from The Towbes Group ... Haws, Record & Magnusson leased 1,077 square feet of office space at 3700 State Street from Lara Property Management ... Machin & Associates leased 1,600 square feet of office space at 3916 State Street ... PartnerCentric leased 885 square feet of office space from Pacifica Capital Bank. Brokers involved: Francois DeJohn, Steve Hayes, Michael Martz and Kris Roth.

PACIFICA COMMERCIAL REALTY: REH Property purchased 22,000 square feet of office/R&D space at 1351 Holiday Hill Road, Goleta, from Christine McLaughlin. Listed price was $3.15 million. Brokers involved: Peter Borneman, Mark Mattingly, Greg Bartholomew and Gene McKnight.

RADIUS GROUP: Wave Coffee House, et. al. leased 6,707 square feet of retail space at 1511 Mission Drive, Solvang, from Mission Drive Partners ... Tri County Blinds & Drapes leased 1,500 square feet of retail space at 3615 State Street from Ontare Partners ... Rabobank leased 1,465 square feet at 5030 Carpinteria Ave., Carpinteria. Brokers involved: Steve Brown, Austin Herlihy, Paul Gamberdella; Phil Kyle and Mike Hieshima, Epsteen & Associates.

To see more of the Santa Barbara News-Press, or to subscribe to the newspaper, go to http://www.newspress.com.

Copyright (c) 2008, Santa Barbara News-Press, Calif.
Distributed by McClatchy-Tribune Information Services.
For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

[ Back To Homepage ]