Software technology companies on the South Coast are looking to sublease significant portions of the properties because of the rise in remote work that began even before the start of the COVID-19 pandemic.
Francois DeJohn, commercial real estate broker and the co-founder of Hayes Commercial Group, spoke with Santa Barbara Talks about commercial real estate trends, from Goleta to Carpinteria.
“The high-tech companies, like AppFolio, Yardi, Procore, LinkedIn, just to name a few, those companies are really struggling to get people back to work because a lot of their employees really enjoyed working flexible schedules, working from home, a lot of them moved out of the area,” DeJohn said.
“I think the work-from-home dynamic is here to stay with the high-tech companies.”
He said a lot of the high-tech companies are trying to encourage their employees to work in the office two or three days a week so they can collaborate and see each other.
But there’s a downside.
“So if people aren’t using their office space, what does that mean for the office market,” DeJohn said.
In 2022, there was about 200,000 square feet of office space put on the market for sublease by high-tech companies.
To start 2022, there was about 750,000 square feet of office space; by the end of the year, it rose to about 1.1 million square feet of office space.
The vacancy rate went from about 7.5% to 11%.
In addition, DeJohn and Molina talk about:
- Why Paseo Nuevo is broken
- What needs to happen at La Cumbre Plaza
- The reasons why Coast Village Road is hot right now.
- The popularity of Camino Real Market Place, the Calle Real Shopping Center and Old Town Goleta.
DeJohn also talks about his views on the homeless situation and how it impacts State Street.
“Frankly, homelessness is probably the biggest issue on State Street for retail,” DeJohn said. “We need to find a compassionate way to get them off the street and help them.”
He also believes the outdoor dining spaces on State Street need to be cleaned up.
DeJohn also talks about his college days playing soccer at UCSB.
Joshua Molina is journalist who currently writes for Noozhawk and teaches journalism at Santa Barbara City College and Cal State University, Northridge. He formerly covered politics and land use for the San Jose Mercury News. Santa Barbara Talks is an independently owned podcast where Molina looks to bring together voices from all perspectives to discuss and provide solutions to the challenges related to housing, education, transportation and other community issues. Subscribe to his podcast here and consider a contribution here.