Vacancy in the Santa Barbara office market is 7.1% and has increased 1.5% over the past 12 months. Meanwhile, the national average increased by 1.1%. During this period, there has been 180,000 SF of negative absorption, and 16,000 SF has been delivered.
Total availability, which includes sublease space, is 9.3% of all inventory. Space rated 1 & 2 Star is the most dominant subtype, with 9.1 million SF in this category. There is 3.4 million SF of 3 Star space and 300,000 SF of 4 & 5 Star space.
Rents are around $33.00/SF, which is a 1.1% increase from where they were a year ago. In the past three years, rents have increased a cumulative 7.9%. Furthermore, this is a moderately affordable market, with average rents below the national average of $35.00/SF.
About 170,000 SF is under construction, representing a 1.3% expansion of inventory. While total inventory is 2,500 SF larger than it was three years ago, that net figure is the result of 48,000 SF delivered and 46,000 SF demolished over that period of time.
In the past 12 months, 32 sales have occurred. Sales have averaged $490/SF, and the estimated value for the market as a whole is $352/SF. The most frequent of these transactions have been those of 1 & 2 Star space, with 28 sales of this space type. This tracks with the overall mix in the submarket, as the subtype is the largest in Santa Barbara.
Over the past three years, there have been 161 sales, which have traded for approximately $623 million. The market cap rate for Santa Barbara is 7.1%, moderately above its trailing three-year average of 6.5%.
Although both employment and population have grown in the past year, employment growth has outpaced population growth. The number of jobs has increased 2.5% in the past year, while the population has grown by 0.3%