Developers are looking to reinvigorate downtown San Luis Obispo by building an 80-room hotel and a public plaza in the heart of the city.
Nick Tompkins of SLO-based NKT Commercial is teaming up with Santa Barbara-based hospitality company StonePark Capital to build a 75-foot tall development that includes a hotel, residential units, office space, retail locations and a plaza.
The 1101 Monterey St. location was a former Shell gas station that was previously approved for two 5,000-square-foot commercial buildings separated by a parking lot. The developers are switching gears to extend the downtown and bring some energy to the “gateway to the city,” StonePark principal Andrew Firestone said.
“A hotel in that location would bring valuable visitors to the downtown area who would eat at restaurants and shop,” said Firestone, adding that it’s one of the most trafficked intersections. “That was our main focus, what would be a benefit to the city. Besides the TOT, it would really be a shot in the arm to the downtown retailers and businesses.”
It would be an “urban” kind of concept that would promote pedestrian access rather than a resort hotel, Firestone said.
In terms of the height, that would be the spot to accommodate a tall building, he said, taking into consideration the lofty county building across the street and the topography of Santa Rosa Street.
The city allows buildings up to 75 feet if they satisfy two policy objectives like pedestrian infrastructure improvements, affordable/workforce housing or energy efficiency.
“We want to create space optimizing the utilization that also fits in with the design, architecture and feel of downtown,” Firestone said. “That’s why we’re submitting it in the conceptual phase.”
Lee & Associates broker Vivian Hanover said there is a high demand for hotels, which often fill up during busy weekends.
San Luis Obispo has a lot of development on the books or in construction, Hanover said.
The university recently inked a deal with developer Copeland Properties to provide 32 housing units for its innovation and entrepreneurship students. Cal Poly signed a five-year lease, with an option for two five-year extensions, at the Blackstone-Sauer building on Monterey Street. The building will feature 6,000 square feet of commercial space and 12,600 square feet of residential.
“San Luis Obispo is going to be exploding,” Hanover said.
The city’s Architectural Review Commission will look at the conceptual plan on Dec. 7.
SWBC consolidates SB office
San Antonio-based financial services company SWBC has closed its Santa Barbara office.
SWBC, which offers insurance, mortgage and investment services, is consolidating its operations to Irvine, according to Lisa Pinto, SWBC associate vice president of public relations.
It closed its office on 14 E. Carrillo St., which happens to be right next to the Pacific Coast Business Times, and asked the employees to relocate to the new Southern California location. If they chose not to move, the company provided severance packages, said Pinto, who did not specify how many employees were laid off.
“There were only a handful of employees affected by the closing of this office,” she wrote in an email.
SWBC acquired Equi-Trax Asset Solutions, a nationwide collateral valuation provider, in October of last year along with Quality Valuation Services. Equi-Trax previously occupied the Carrillo office.
The close to 4,000-square-foot location is available for lease for $2.15 a square foot plus utilities and janitorial costs. The space is available beginning the first of next year.
Office space is tight in Santa Barbara, especially downtown, according to Hayes Commercial Real Estate. The vacancy rate is at 4.3 percent, the Hayes third-quarter report states. The all-time low was 3 percent in 2007.
Fillmore apartments sold
An 11-unit apartment building in Fillmore sold for $751,250.
The development at 203 Santa Clara St. is comprised of five detached buildings on a 14,308-square-foot lot.
The undisclosed buyer purchased the development from Oxnard-based MacMar Properties in an all-cash deal as part of a 1031 exchange. More investors are using 1031 exchanges to defer capital gains taxes by buying and selling similar buildings within a 45-day timeframe. Nick Henry of the Channel Group represented the seller.
It sold at close to a 6 percent cap rate, which is the ratio of net operating income to property asset value.
Apartment complexes continue to be hot investments in the Tri-Counties.
• Contact Alex Kacik at [email protected]