Empty Space in Affluent Santa Barbara, California, Revamped for Bustling Tech Sector
Nationwide, clothing outlets are shrinking their real estate while technology firms are growing theirs. Now, those two trends are converging in an affluent California city: Amazon has opened a new tech office in Santa Barbara as the online giant plans to double its workforce in an area where developers are increasingly converting unused retail space into higher-demand offices.
The Seattle-based business established new offices at 1001 State St. in downtown Santa Barbara at a 48,000-square-foot space that previously housed a Saks Fifth Avenue retail store. Officials said the office is scheduled to initially employ 150, and the company has plans to double that in coming years as Amazon builds out its office and distribution network nationwide.
Teams in Santa Barbara are expected to be working on technologies geared to helping Amazon’s voice-activated Alexa assistant better process factual knowledge on devices such as Amazon Echo and Fire TV. Those teams will work with scientists in Amazon’s development center in Cambridge, England.
Technology companies have been a major post-recession driver in filling commercial space in Santa Barbara, especially as the city, like others across the United States, has dealt with closings by chain retailers such as Saks, Macy’s and office supply chain Staples.
An April 2019 report by brokerage Hayes Commercial Group noted that tech firms have gravitated from Santa Barbara’s outlying suburban neighborhoods to the core downtown business district during the past decade.
“The recession hit the State Street retail sector particularly hard, and the once renowned destination shopping corridor continues to struggle under double-digit vacancy,” said Hayes Commercial Partner Greg Bartholomew in the report. “Recognizing that State Street has a long-term problem of oversupply, companies such as Sonos, LogicMonitor and now Amazon have converted retail buildings fronting or near State Street to ‘creative’ office space.”
Amazon has also posted job openings for additional positions in Santa Barbara, including software and data engineers and product managers.
“We have been able to hire great talent in Santa Barbara and look forward to doubling our workforce here,” Kevin Davis, who heads Amazon’s Santa Barbara office, said in a company statement.
Amazon said it has created more than 45,000 full-time jobs in California since 2010 and invested over $34.5 billion in the state, including infrastructure and employee compensation.
The repurposing of retail properties has helped to alleviate a relatively tighter downtown supply of office space in Santa Barbara, with several projects in the works to convert retail into office and mixed-use residential developments. Tech companies arriving in the area have helped to diversify an office base that was largely occupied by the financial and legal sectors.
“Nearly all agree that having more tech employees working near State Street adds dynamism and economic vitality to the downtown area,” Bartholomew said. Hayes Commercial reported there were 68 tech companies with operations in downtown Santa Barbara as of April 2019.