2025 Q1 Report

A Season of Investor Caution

Commercial sales activity was sluggish in Q1, continuing (and deepening) the low-volume trend of the past two years. There were only 11 transactions along the South Coast, which is less than half the quarterly average during the prior five years. The total dollar value was $30 million, the lowest Q1 total since 2009 and 59% below the 5-year average.

We should note that two local shopping centers—Magnolia Center and Casitas Plaza— transitioned ownership in a $4 billion REIT acquisition. While these were unpriced transfers and excluded from sale totals, they underscore ongoing institutional interest in the area.

The lending environment continues to inhibit sales, as buyers confront higher interest rates, and sellers have generally resisted lowering their price expectations accordingly. In other markets, higher interest rates have induced leveraged owners to sell when their loans come due, but so far this pressure hasn’t produced an increase in supply or “distressed” pricing locally.

Investor activity was more limited this quarter, with just two investment sales—a record low compared to the 5-year average of 12. Highlights included a $4.2 million acquisition the 24,600 SF office building at 5638 Hollister Ave in Goleta, and a premium-priced retail/office property at 730 Anacapa St in Santa Barbara, purchased at over $1,300 per SF.

Read the full 6 page report here:https://www.hayescommercial.com/2025/04/2025-q1-report/