Airport Commission adopts new commercial and industrial lease rate ranges for Santa Barbara Airport

The Santa Barbara Airport Commission voted unanimously June 12 to adopt revised rate ranges for the airport's commercial and industrial properties; the new ranges take effect July 1 for new leases and apply at renewal for existing tenants.

Why it matters: The airport manages roughly 173,000 square feet of office, retail and storage space and about 337,000 square feet of aeronautical space outside the air operations area. Staff said the revised ranges better align airport rents with the Goleta market while preserving flexibility for lower-quality buildings that target budget-conscious tenants.

John Feldhans, properties manager, told commissioners the airport benchmarks rates against the Goleta market and classifies buildings by quality: class A/B (higher-quality, renovated) and class C (older, limited amenities). He said market averages declined between fourth quarter 2024 and first quarter 2025—office down about 3%, retail down about 5% and industrial down about 14%—and that airport floors remain below market on lower-end properties but approach or exceed market on higher-end leases.

Feldhans said the airport manages building condition variations by keeping flexibility in rates: newer or renovated buildings can command closer-to-market rates while older class C properties remain priced to attract budget tenants. He noted the properties division is working to be more consistent in lease structure and to include CAM charges where community space exists.

Commissioners pressed staff on vacancy and lease structure. Feldhans said vacancy is low among buildings available for rent, though several buildings are being mitigated for mold and one tenant recently vacated for a move to a new building. He said lease terms vary and depend on when the lease was negotiated; some long-standing leases include different cost-sharing arrangements. Staff said most existing leases include escalators that will keep rents near the new ranges, and that current leases will not be changed until they are renewed.

On development, Feldhans said the airport's near-term capital priorities are aviation-focused projects such as FBO redevelopment, terminal improvements and potential parking structure work. He said large-scale new building development on the north side would likely require public-private or public-public partnerships and that future ground leases rather than facility leases may be used for new development.

Commissioner Houghton and others urged stronger emphasis on developing buildings to retain university spin-outs and incubator companies locally. Commissioners and staff said the airport is coordinating with the cities of Santa Barbara and Goleta and with the regional chamber on economic development goals.

The commission approved the proposed rate ranges and staff recommendations. Staff said the new ranges will govern leases executed July 1 or later, and that renewals will be adjusted to fall within the new ranges when those leases come up for renewal.

Votes at a glance: - Consent calendar: motion moved and seconded; passed unanimously. - Airport property lease rate ranges: motion to approve moved and seconded; passed unanimously. The commission recorded the motion as passing without opposition and the rates become effective July 1 for new leases; renewals will be adjusted at the time of renewal.

Provenance (excerpted from the meeting transcript): "I'm gonna turn this one over to John Feldhans to go over our annual, airport property lease rates." (topicintro). "I move to approve the new rates...All in favor? Aye. Aye...Passes unanimously." (topicfinish).