August 6, 2007
Mid-Year Report

by Barbara Pearson, Pacific Coast Business Times

Leider Hayes Commercial Real Estate of Santa Barbara reported a 2.6 percent vacancy rate in the Santa Barbara office market as of June 30.

Average asking rate has gone up 3 percent since the beginning of the year to $2.20 per square foot, triple net. The average deal rate has risen 13 percent to $2.09 . Out of 5 million total square feet of office space, 129,000 square feet is currently vacant.

"Rental rates are seeing a real pop," said Francois DeJohn of Leider Hayes. "They're up 13 percent since the beginning of the year just on deal rates so we're seeing some real pricing power in the Santa Barbara office market for landlords."

Goleta office vacancy was at 6.2 percent in mid-2007. Average asking rate in the area was up 4 percent to $1.41, while the deal rate was down 3 percent to $1.34. Twenty properties totaling 265,000 suqre feet are currently available out of a total 4.3 million square feet of Goleta office space. Gross absorption in the period was 90,000 square feet. A 58,000-square-foot lease by Citrix is evident of the company's long-term commintment to the area, DeJohn said.

In Carpinteria, office vacancy is 10 percent - it's lowest level in six years - with no change in average asking rate [$1.15] or deal rate [$1.19] compared to the beginning of the year.

In addition, a pending deal at 6410 Via Real will drop the vacancy further down to 5 percenet. At 6380 Via Real, 80,000 square feet has been approved for development, adding a good chunk to the 565,000 square feet of office space that exists in Carpinteria.

In Santa Barbara's retail sector, vacancy is just over 1.7 percent with an average asking rate of $3.30. The average deal rate has gone up 16 percent in the last six months to $3.48 as of June 30. There were 12 leases totaling 52,000 square feet in the same period, leaving 183,000 square feet available out of a total 10.5 million square feet of retail space in the city.