A 38,015 square-foot retail property in Santa Barbara recently hit the market, with an asking price of $20.67 million, or $543.75 per square foot. The property was put on the market June 10, and is 100 percent leased to Marshall’s, according to an offering memorandum for the property.
According to CBRE, the brokerage firm listing the property, the three-story retail building is located at 900 State Street on 0.5 acres of land. The building was constructed in 1960, and was most recently renovated in 2011. It is also near 1,197 public parking stalls within one block of the property, including 264 parking stalls in an adjacent lot.
Currently, the property is in a 32-year lease agreement with Marshall’s, its only tenant, at least through 2027. While approximately six years remain on the lease, the agreement has built-in rental increases at the next three and five years.
The current tenant is a wholly owned subsidiary of parent company TJX Companies Inc., which also owns TJ Maxx, HomeGoods and Burlington Coat Factory. With the aftermath of the COVID-19 pandemic, CBRE predicts that the many shoppers will continue to seek affordable options and will continue taking advantage of off-price retailers, such as Marshalls and other TJX properties.
“900 State Street is an Iconic building in the heart of Downtown Santa Barbara on the corner of East Canon Perdido Street. In addition to being the main retail corridor in Santa Barbara State Street is also quickly becoming a hub for technology companies,” Simon Mattox, the listing agent associated with the property, said. “The Marshalls building is similar to the former Saks Fifth Avenue property just blocks away at 1001 State Street that was recently converted into the Regional Headquarters for Amazon’s Alexa software. Similar size buildings ranging from retail to creative office space conversations have rented for an average of $3.34 per square foot which is almost double Marshalls’ current rents.”
The property is located in the heart of Santa Barbara. The pedestrian-friendly downtown area is near many other retail properties, including the neighboring 458,000 square-foot Paseo Nuevo Mall. The mall recently underwent a $20 million renovation by Pacific Partners and JP Morgan Asset Management in effort to bring in more customers.
The area overall brings in a high amount of traffic, according to CBRE. The brokerage firm reported that Santa Barbara averaged 7.2 million annual visitors in the past several years, with 63 percent of them visiting State Street during their stay. Of those travelers, shopping was the third highest participating activity at 50.1 percent of all visits, followed by dining and visiting beaches.In addition, the Santa Barbara City College nearby brings in approximately 18,000 students annually. The Santa Barbara residential population also reaches approximately 69,000, with a daytime population at more than 82,000 people.
Household incomes within two miles of the property average $122,938.