National surveys report that industrial has been the commercial property type least impacted by the pandemic, and this has proved true on the South Coast as well. Whereas the local office and retail sectors have seen significant increases in vacancy since the pandemic began, available industrial space has actually decreased 22% on the South Coast since the beginning of 2020.
[This is an excerpt of the full midyear market report, which is available here.]
Goleta saw two large leases signed in Q2. First, Kate Farms leased 34,551 sf at 30 S La Patera Ln, part of the space vacated by Powell/Skate One. That leaves about 67,000 sf still available there. The other lease was 47,047 sf signed by Deployable Space Systems at 7418 Hollister Ave at the former LogMeIn campus. That building now has about 49,000 sf remaining for lease, the last of the LogMeIn space yet to be backfilled. Following those leases, the vacancy rate is down to 3.6%, its lowest level since 2017. Achieved rates continue to rise, averaging $1.68 gross per sf so far in 2021.
In Santa Barbara, vacancy popped up into the 1.5% range for three consecutive quarters, but Q2 leases helped reverse that trend. An unnamed tenant leased 12,500 sf at 411 E Montecito St, and the Tent Merchant renewed 12,525 sf at 436 E Gutierrez St. In addition, a construction tenant leased 80,000 sf of yard plus a 4,000 sf industrial building at 27 N Nopal St. At midyear, the vacancy rate was down to 0.74%, lower than before the pandemic.
Similarly, Carpinteria’s vacancy rate was whittled down to 1.7% at midyear following above-average deal flow of 6 leases totaling 60,000 sf. Dakar leased 19,400 sf at 1015 Cindy Ln in Q2, the largest lease to date.