State Street shopping scene heats up with boom in leases

There’s a summer retail shuffle happening on Santa Barbara’s State Street. The region’s versions of Rodeo Drive has seen a number of new leases, expansions, and moves this summer, including the lease of one of the largest vacant spots downtown.Here’s a closer look:

Panera Bread has leased the 5,753-square-foot former Left at Albuquerque space at 700 State St. The corner restaurant space, which includes a large, covered patio in front, has been vacant since before investors purchased the property in July 2010. (terms of that deal weren’t disclosed, but the property was listed for sale for $4.1 million, making it one of the priciest locations downtown). No word yet on when the sandwich chain will open its doors.
Jewelry store Gauthier is slated to open its new store at 921 State Street, formerly occupied by Paper Star, on Aug. 2. The 1,560-square-foot lease was handled by Hayes Commercial Group earlier this year.
In August, t-shirt boutique Michael Stars is moving into the former Betsy Johnson location at the corner of State and Carrillo streets from 613 State St. The Betsy Johnson brand filed for a reorganization that included closing most of its retail stores earlier this year.
Persona Pizza recently leased the formerly Taj Café at 905 State St.
High End consignment and secondhand clothing stores are fast becoming a Santa Barbara staple. The Off-Leash pet boutique at State and Figueroa streets has closed, a consignment store called Ooh La La has opened there.
American Apparel recently moved from 1019 State St. to a much larger space, formerly occupied by women’s apparel Coldwater Creek, at 733 State Street. The owner of the now vacant 1019 State St. property, meanwhile, is performing a substantial remodel on the sore front.
“The first six months of 2012 saw healthy demand from local and national retailers looking to secure locations in downtown Santa Barbara,” Hayes Partner Michael Martz told me in an email interview. “Spaces have leased more quickly and often with multiple offers.”

He noted that the boom in deals has brought the city’s retail vacancy below 2.5 percent for the first time since 2009. Achieved lease rates have jumped 14 percent since the end of last year, Martz said.

Lower State Street is seeing renewed attention as well, helped along by progress at the water front La Entrada hotel project, as well as the opening last year of a new REI Store and Casa Blanca Restaurant next to the freeway overpass. Those retailers “have brought new energy to the 300 block”, Martz said, noting that Santa Barbara Rock Gym also recently signed a lease nearby.

Martz said retail leasing is typically most active in the first half of the year, as businesses position themselves for growth. “We forecast leasing to taper somewhat through the remainder of the year as retailers focus on gearing up for the impending holidays in their existing locations,” he said.