A landmark retail asset located at 1486 East Valley Road in Santa Barbara’s tony Montecito neighborhood has been sold for approximately $16 million, or roughly $2500 per square foot. Built in 1931 and serving as the community’s first firehouse, the Spanish Colonial Revival building was designed by award-winning architect Alexander Bertrand Harmer and is the most recognizable commercial property in Montecito.
The 6,357-square-foot building is currently occupied by Union Bank through their recent acquisition of Santa Barbara Bank & Trust. SBBT executed a 20-year master lease for the property in 2009, and invested in significant upgrades.
“Both parties viewed this transaction as an opportunity to realize value. The seller leveraged the lack of quality product in the market and the compression in cap rates to achieve a premium price, and the buyer recognized the advantage of investing in a truly irreplaceable asset, particularly one with a committed long-term tenant,” said Miller.
“It was a noteworthy first purchase in a market with high barriers to entry,” added Bauman.
Montecito is consistently ranked by Forbes magazine as one of the wealthiest communities in the United States.
This marks the second significant single tenant sale by Studley’s National Retail Services Group in the last six months in Santa Barbara County. In December of 2012, Studley sold the Whole Foods on Upper State Street for over $1200 per square foot. Additionally, Studley is currently marketing or in escrow on over $45 million of retail activity in Santa Barbara with another $25 million coming online in the next 30 days. “Given the coastal nature, exceptional demographics, and high barriers to entry of Santa Barbara, we anticipate strong investor demand will continue to push pricing in this sub-market,” noted Miller.