January 14, 2020 – JLL Capital Markets announced today that it has been selected by Urban Developments to market for sale Santa Barbara Public Market, a 19,867-square-foot, LEED Certified, state-of-the-art artisanal food hall in Santa Barbara’s historic downtown district.
Completed in April of 2014, Santa Barbara Public Market comprises a two-story, LEED Gold food hall with a 4,500 sq. ft. basement. The food hall space is home to a curated list of popular food and beverage tenants, including Empty Bowl Gourmet Noodle Bar, Enjoy Cupcakes, Rori’s Artisanal Creamery, Wine + Beer, Corazon Cocina, The Garden, Wabi Sabi, Ca’ Dario Pizzeria Veloce and Fala Bar. The market still has some of its original vendors that were there on opening day five years ago. The retail property is also home to a mural by renowned local artist Joseph Knowles, which has been designated as a Structure of Merit by the city of Santa Barbara.
Situated at 38 West Victoria Street, Santa Barbara Public Market is adjacent to Alma Del Pueblo, a premier condominium community, and proximate to State Street in the historic El Pueblo Viejo downtown district and other Santa Barbara tourism hot spots such as the Arlington theater, the New Vic theater and the Granada Theatre. Additionally, the property is in an affluent area with an average household income of $112,718 within a three-mile radius.
Marge Cafarelli, the California developer behind Urban Developments and who opened the Santa Barbara Public Market, spent five years developing the food hall into the successful and stabilized business that it is today. Initially opened with a mix of food and grocery tenants, she pivoted the retail property from a European-style public market to become a true food hall.
“Developing the Santa Barbara Public Market has been one of the hardest and one of the most gratifying projects I have ever done,” Cafarelli said. “We wanted to create a place for Santa Barbara to come together under one roof – a place that locals have embraced and now call their own.”
The JLL Capital Markets team representing the seller was led by Executive Vice Presidents Patrick Toomey and Tom Lagos.
“Marketing the Santa Barbara Public Market is an exciting opportunity since it is part of the hot Food Hall trend that is sweeping retail these days,” Toomey said. “The property boasts best-in-class construction, a diverse and successful tenant mix and a fantastic Santa Barbara location, making it an exceptional investment for the next owner.”
Food halls fill the experiential retail gap. They showcase local identity, serve nearby office and residential communities and promote local industries and small businesses. According to a JLL Report, more than 300 food halls will be operating in the U.S. by the end of 2020. Food continues to be the new anchor for retail assets. Shoppers who dine at a property stay, on average, 35% longer and increase transactions by 25%. Food-anchored assets continue to drive investor demand.
“Food Halls are an emerging trend in the retail space and are capitalizing on the consumer trend of wanting high quality food in an experiential setting,” Lagos added. “The Food Hall brings in diverse food artisans – in some cases celebrity chefs – in a hip, socially engaging environment. Many of these halls are Instagram hits not only for the food but also the crowd that they attract. We anticipate a continued upward trend for this product type as it matures.”
Additionally, retail is seeing healthy demand. Over 9,500 tenants signed new or renewal leases in the second quarter of 2019, with gross absorption totaling approximately 48.5 million square feet. Total retail demand was led by restaurant/F&B tenants followed by service tenants.