July 20, 2024
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Real Estate: Hotel Californian was Santa Barbara’s biggest hotel sale in years

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The Hotel Californian on lower State Street in Santa Barbara (file photo)

The Hotel Californian on lower State Street in Santa Barbara was purchased for an estimated $130 million, according to Hayes Commercial Real Estate’s recently released South Coast market report.

Foley Entertainment Group, founded by Las Vegas Golden Knights hockey owner and Santa Barbara County wine magnate Bill Foley, bought the 121-room hotel near Santa Barbara’s waterfront and Funk Zone. The Business Times reported the news of the purchase in early September but the price was not disclosed at the time.

The sale marks the first major hospitality acquisition on the South Coast in several years, and represents “a prominent vote of confidence in both Santa Barbara tourism and the waterfront trade areas,” Hayes wrote in its report.

The Hyatt Centric on East Cabrillo Boulevard, along Santa Barbara’s waterfront, sold in 2018 for $87.5 million, according to Ted Hoagland, marketing director for Hayes. Before that, the Ritz-Carlton Bacara in Goleta sold in 2017, for a price Hayes estimated at $240 million.

The 87-room Pacifica Suites hotel on Hollister Avenue in Goleta also sold in the third quarter of 2021, for $27.5 million.

Commercial sales transactions gained steam as the year progressed, following a slow start in the first quarter of 2021. The South Coast had 34 commercial property sales closed in the third quarter, the largest quarterly total since 2012.

Brooke Holland
Commercial Real Estate

The year-to-date dollar volume, excluding hotels, is about even with the pre-pandemic five-year average, while transactions are up 7%. In addition, Hayes’ report said the inventory of properties for sale has contracted to pre-pandemic levels.

“Based on these benchmarks, the level of demand we are seeing, and deals under contract, all indications are that the sales market has recovered from the economic slowdown caused by the pandemic,” the report states. “The one caveat to consider is that most leasing submarkets are still in a phase of recovery, which could over time create an undertow in sales pricing and activity.”

Industrial sales have been especially robust year-to-date, generating more than double the transactions and dollar volume compared to 5-year averages.

“The phenomenon of wealthy individuals buying small industrial properties for personal storage and/or hobby space — rather than commercial use — is gradually becoming a trend and represents another vector of demand for scarce industrial space on the South Coast,” the six-page report states.

The average price paid for industrial property this year is $495 per square foot, Hayes said, which is more than double the average price in the Los Angeles industrial market.

GROUNDBREAKING IN SIMI

The developers of Tapo Canyon Commerce Center, a five-building 344,000-square-foot industrial complex in Simi Valley, recently celebrated with a groundbreaking, Newmark announced Nov. 3.

Situated on nearly 20 acres at 1800 Tapo Canyon Drive, the complex offers above regional standard dock high loading, five different access points to campus and immediate access to Highway 118.

The project is owned and developed by Texas-based Stream Realty Partners and QuadReal Property Group, a global real estate investment group based in Vancouver.

Newmark said the modern industrial buildings range from 25,786 square feet to 135,579 square feet, and will have leasing options from 19,239 square feet to the entire campus.

HPA Architecture is the project architect. The civil engineer is Kimley-Horn, and KRPS is the project’s general contractor.

HOUSING EVENT ON TAP

In celebration of Cabrillo Economic Development Corp.’s 40th anniversary, the nonprofit will host a webinar with Lourdes Castro Ramírez, the secretary of the California Business, Consumer Services and Housing Agency.

The event is free and open to the public via Zoom, and is scheduled for 11 a.m. on Nov. 17.

Additionally, Cabrillo EDC officials will highlight the organization’s innovations in affordable housing. For more information about the event, visit CabrilloEDC.org.

Cabrillo EDC, which manages more than 1,130 homes at 24 properties, is the largest developer of affordable homes in Ventura County, according to the organization.

• Brooke Holland covers commercial real estate for the Pacific Coast Business Times. She can be reached at bholland@pacbiztimes.com.