A laid-back coastal California resort town is seeing its status climb among commercial property investors and tenants, and national brokerage Colliers is getting in on the action.
Colliers has hired three brokers with deep knowledge of the Santa Barbara market to staff its new office, becoming the first brokerage of its kind to set up shop in the county located about 70 miles north of Malibu in Los Angeles.
Executive Vice President Austin Herlihy and Vice Presidents Chris Parker and Miles Waters will collectively sell and lease office, retail, hotel, industrial, land and multifamily space across the region for Colliers.
The three brokers, with 40 years of combined local history and $2 billion in sales completed, previously worked for Radius Commercial, one of Santa Barbara’s most prominent leasing and sales firms.
For Colliers, the new office is as much about tapping Santa Barbara's wealthy residents and visiting CEOs as it is about leasing and selling local properties, according to the team.
"We've sold some very big, iconic assets here in Santa Barbara," Herlihy told CoStar News. "And through that, we've made some real contacts that we can take now to do business in other markets."
Commercial property sales across the greater Santa Barbara area totaled $108 million in the fourth quarter, up 57% from the same period last year, according to Radius Commercial.
Only game in town
Colliers had been looking to expand its Southern California business into Santa Barbara for a while, but was waiting for the right brokerage team to launch the office, said Ricardo Pacheco, managing director of brokerage for Colliers' Greater Los Angeles and now Santa Barbara offices.
"No one has had a presence in Santa Barbara from the major publicly traded commercial real estate firms," Pacheco said. "We saw it as a huge opportunity to bring our research, marketing and a global network of brokers that can serve clients that are based in Santa Barbara, but may have real estate or businesses that are outside of the local market as well."
Meanwhile, Herlihy and his team wanted to expand beyond Santa Barbara after a string of high-profile deals including the sale of the Hotel Californian at 36 State St. in the city.
"Santa Barbara has really become an international city," Herlihy told CoStar News. "We have people from all over the world. And they may not be involved in commercial real estate here, but they are CEOs of major corporations."
The pandemic prompted many executives and founders to depart nearby dense cities like Los Angeles in favor of Santa Barbara, Herlihy said.
"Maybe a company starts here in Santa Barbara and a local firm like our old firm wouldn't be able to take that company and lease them space in Austin, Texas, and in New York," Herlihy said. "And that's really where Colliers comes in and gives us that opportunity to really service the client and help that client expand their business."
A new tech tide
Like most office markets across California, Santa Barbara is still struggling to return to pre-pandemic occupancy levels. The vacancy rate has been trending at 6.6% during the first quarter after rising more than 50 basis points in 2024, above the 2019 level of roughly 4%, according to CoStar data.
Santa Barbara office leasing volume reached its highest level last year since 2021, but was still off 30% from the peak in that year.
The University of California at Santa Barbara is a talent magnet and an incubator for new businesses, especially in the tech sector, Herlihy said. Santa Barbara has a cluster of aerospace, healthcare and defense-related employment, including companies associated with the Vandenberg Space Force Base.
"Look at Stanford in 1980s. Palo Alto didn't look like it does now. You have some really smart people with capital and things start to grow and evolve," Herlihy said. "Santa Barbara can be that. And we want to be on the forefront of that."
Google counts a quantum computing campus in the suburb of Goleta that was home to a major technological breakthrough at the end of last year when it unveiled a chip able to solve complex mathematical problems at never-before-seen speeds. The tech giant has purchased 8 acres nearby to build another facility. Other growing local tech players include wireless speaker maker Sonos, construction software firm Procore Technologies and food tech firm Apeel Sciences.
Tech behemoth Amazon rents space downtown for its artificial intelligence business and regularly hosts executive conferences at the building because so many Amazon executives want to visit the seaside enclave, Herlihy said.