The Nordstrom building in downtown Santa Barbara is nearing a sale, and the new owner is looking to turn the upper floors into office space, according to a report released by Hayes Commercial Group on July 30.
The building is at the northern end of Paseo Nuevo. Most of the outdoor mall is owned by Pacific Capital Partners and Silverpeak Real Estate Partners, but those companies do not own the Nordstrom building. Hayes did not release the name of the buyer or seller.
Nordstrom was one of the outdoor mall’s two anchors, along with Macy’s. The Macy’s store closed in 2017 and the Nordstrom closed in 2020, leaving the center without a prime retail anchor.
The Macy’s building is now being converted into offices, and the Nordstrom building looks likely to follow suit under its new owner, at least for the second and third floors of the three-story building.
Converting those floors to office space would push the Santa Barbara office vacancy rate even higher than it already is. The city’s office vacancy rate is currently 10.8%, the first time that Hayes Commercial has seen a double-digit vacancy rate. The current total of 108 spaces available in Santa Barbara is also a new high, Hayes said.
If two new floors of offices are added to the city and are not immediately filled, the report estimates the office vacancy rate could rise as high as 13%.
Note: This article was edited shortly after it was posted to clarify the ownership of Paseo Nuevo and the Nordstrom building.