Santa Rosa is the largest city between Portland and San Francisco with an estimated population of 175,000. It serves as the county seat for Sonoma County which is known worldwide as a leading wine region and has become a major player in the up and coming craft beer industry. Along with the agriculture the region is famous for; Santa Rosa is also home to other industries including high-tech, biomedical, manufacturing, education, tourism, and various other professional and personal services. The labor market has bounced back with companies hiring new employees. This is evidenced by an unemployment rate of just 4.7% down from the double digit rates we were experiencing at the height of the recession. There is a quality of life in Sonoma County that drives residents and companies alike to the region. This creates an environment for prospering business with Santa Rosa serving as the economic hub.
The major business parks and shopping centers put together the bulk of the base occupancy in the region. In South Santa Rosa there is the Industry West Industrial Center and the Oak Manor Industrial Area which have many large manufacturing warehouses, as well as the Northpoint Corporate Center with a mix of Office and Industrial. In Central Santa Rosa there is a vibrant downtown area with a mix of office and retail as well as the nearby Santa Rosa Business Park and the Stony Point Office Park which both have large multi tenant office buildings. Further north is the airport area with parks such as the Airport Business Center and Westwind Business Park which have a mix of office and industrial uses. Santa Rosa is also home to three shopping malls which together house over 200 merchants.
The economic recovery has accelerated over the past few years; particularly the industrial and retail market and high occupancy rates have allured investors to these product types. Santa Rosa has over 16,000,000 square feet of industrial buildings with a current vacancy rate of approximately 8% and almost 8,000,000 square feet of retail buildings with a vacancy rate of approximately 3.4%. These low vacancies have attracted investors and we are seeing more competition for available investments and lower cap rates which make it a great time for owner’s to consider selling. The office market has been slower to recover with a vacancy rate of 16% in over 9,500,000 square feet of office buildings. This also provides great opportunity for owner-users to be able to buy a vacant building for their business and take advantage of the still low mortgage interest rates.