Former Macy’s Building Being Converted to Offices in Downtown Santa Barbara

Hayes Commercial Group says owners are looking for tenants in 20,000-to-40,000-square-foot office spaces on top floors

The former Macy’s building in downtown Santa Barbara will be transformed into office space, the Hayes Commercial Group announced Monday.

Located at 701 State St., the 132,500-square-foot building in the Paseo Nuevo shopping mall will feature the “largest office floor plates” in Santa Barbara’s downtown, with more than 40,000 square feet on each level and half-floor suites in the 20,000 square feet range, according to Hayes.

“Frankly, there aren’t a lot of tenants in our area looking for 20,000 or 40,000 square feet of office,” Francois DeJohn of Hayes Commercial Group said in a statement. “So we are marketing to companies in Los Angeles, Silicon Valley, and beyond to consider adding an office location in Santa Barbara.”

The ground floor of the three-story building is being marketed to retail, restaurant and grocery tenants, Hayes Commercial Group said, and the building is expected to accommodate a mix of commercial uses.

In 2018, El Segundo-based Pacific Retail Capital Partners acquired the vacant structure, which is now known as the Ortega Building.

Pacific Retail’s architects determined that the structure is not suitable to convert into apartments or condos, according to Hayes Commercial Group, which will be marketing the office spaces.

“Office is the ‘highest and best use’ for the building, especially the upper two floors,” Greg Bartholomew of Hayes said in a statement. “State Street has more than enough retail space already, and bringing potentially hundreds of office workers to this location every day would help vitalize the area.”

He added: “Downtown Santa Barbara has become a focal point for tech tenants during the past 10 years. With companies like Amazon, Honey, Sonos and Invoca leasing large office spaces along the State Street corridor.”

Macy’s occupied the building at the corner of State and Ortega streets from the time Paseo Nuevo was built in the early 1990s until the national retailer announced that it was closing its doors in early 2017.

The building is part of the 450,000-square-foot Paseo Nuevo, and the majority of the shopping center is owned and operated by Pacific Retail.

“This is an exciting project to work on because there is nothing like it on the South Coast,” Hayes said. “It has the potential to infuse significant business energy and a bunch of high-quality jobs into the center of downtown, which will benefit the community.”

In the years since Macy’s left, community members have been wondering what would happen with the huge, corner building, and proposed everything from moving the police station there, to bringing in a small Target, to a mixed-use project with housing, stores, offices, or all three.

In 2018, a partner at Hayes noted that significantly changing the building would be a challenge since it was built specifically for the Macy’s retail store, and has few windows.

Both of the Paseo Nuevo mall’s anchor buildings – the former Macy’s and former Nordstrom – are vacant.

The mall management firm has a long-term lease with the city, and at the time it was signed last April, Nordstrom was still around.

The store closed last summer and the Paseo Nuevo managers said they would consider building a hotel or housing at the site.

Converting the former Macy’s to offices comes a few years after the former Saks Fifth Avenue building, at 1001 State St., was converted into offices and leased to Amazon.

The company uses the downtown Santa Barbara building for engineers and other employees working on Alexa, the company’s virtual assistant.

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