University of California buys hilltop QAD property for more than $100M
The former headquarters of software firm QAD in the Santa Barbara area has been sold for an estimated $104 million to the University of California, according to a deed filed with Santa Barbara County Clerk-Recorder on June 24.
Kiki Reyes, the media relations manager at UC Santa Barbara, confirmed to the Business Times on June 29 that UC Investments purchased the property as an investment.
UC Investments manages the University of California’s investment funds and provides fiduciary oversight for an investment portfolio that totaled $168 billion as of June 2021. The investment portfolio includes retirement, pension and endowment funds and cash assets.
The University of California purchased the property through Regency Innovation Place, an LLC that was registered in Delaware on May 12, according to a document filed on June 9 with California Secretary of State’s Office. The LLC has the same address as the University of California Office of the President in Oakland.
The former QAD property covers 29 acres at 100 and 101 Innovation Place, on a hilltop overlooking Highway 101 and the Pacific Ocean between Montecito and Summerland.
The property was on the market since at least May 4, when Gene Deering, a principal at Radius Commercial Real Estate in Santa Barbara, mentioned it during a UCSB Economic Forecast Project event in downtown Santa Barbara.
In attendance that day was Jagdeep Singh Bachher, the chief investment officer and vice president of investments for the UC Office of the President.
“I was very impressed with some of the properties I saw in the slideshow,” Bachher told the crowd after the Radius presentation. “Full disclosure: I did tell my friend to get me a tour of one of those after this. … I’m going to go look. I’m being honest.”
Peter Rupert, a professor of economics at UC Santa Barbara and the director of the UCSB Economic Forecast Project, told the Business Times that he accompanied Baccher on a visit to the QAD property later that day.
“He just thought that there’s no other property like it. It’s 29 acres with the most beautiful view of all time,” Rupert said. “The facilities are amazing. What Pam Locker and her husband, Carl, did with the structures are just incredible. They’re very clever.”
Pam Lopker was the founder of QAD and her late husband served as its CEO. The company, which provides cloud software to the manufacturing industry, was acquired last year by the private equity firm Thoma Bravo in a $2 billion deal.
In addition to the former QAD headquarters, the property has offices that are leased to other technology companies. QAD plans to move to a smaller headquarters in the Santa Barbara area and embrace a “virtual-first” workforce.
Rupert said the University of California doesn’t have any plans yet for the property. It could lease the space to a big tech company that wants a bigger presence in the Santa Barbara region, like Google or Amazon, which have offices in the area.
Or it could turn the property into a technology hub or incubator that attracts people and companies from Santa Barbara and beyond, including Ventura and Thousand Oaks.
Rupert said there isn’t a ton of demand for such a tech hub at the moment, but the sector is growing.
“I think this could be huge for the community,” he said. “One of the issues is that between here and Thousand Oaks there’s very little of that tech kind of space, so that could be huge.”
The property is not zoned for residential use, but given the size of the space, that could also be a possibility.
Rupert also hopes the land could be utilized by the UC system or by UCSB, whether that means offering extension classes at the location or having a satellite campus like the one Westmont College has in downtown Santa Barbara.
“I would like to see it used by the university or the UC system, but for the community. … I think that would be a really, really good thing to do for the UC system,” Rupert said. “I think if they just decided to lease it out to a big corporation it won’t do as much for the community, but it is up to them.”
UC Investments can afford to be patient with the land. A private equity firm might feel the need to make a return within five years. But, Rupert said, Baccher is working on a longer time scale, and holding the property for a decade could pay dividends for the UC system.
QAD was founded in Carpinteria in 1979 and later moved to the Summerland spot. It owned the property and leased some of the 120,000 square feet of space to other companies.
One of those tenants is Kate Farms, a nutrition supplement company. CEO Brett Matthews told the Business Times in May that his company had heard QAD was selling and would be moving into its new headquarters by August. QAD has not made any announcements regarding a new headquarters, as of June 29.
QAD decided to sell the land, at least in part, because of its employees’ desire to work from home most of the time. The company employs around 2,000 people worldwide, 635 of them based in North America and around 170 in Santa Barbara.
CEO Anton Chilton said QAD will find a new headquarters that is “set up specifically for periodic gatherings and collaboration and aligned with the way we work post-COVID.”