A commercial property along Santa Barbara’s waterfront, housing a popular restaurant, has been listed for sale.
Located at 216 W. Cabrillo Boulevard, the property is an income-producing coastal asset in the heart of the city, according to Radius Group Commercial Real Estate.
Home to the longstanding restaurant Chad’s, the property is priced at $5.75 million. The building spans more than 3,257 sq. ft. across a single level and is situated on a 0.21-acre lot in Santa Barbara’s coastal commercial zone.
The property has been leased to Chad’s Restaurant, a staple in the community that has operated since 1957, according to the listing. The restaurant occupies the entire site under a long-term lease, providing the property owner with rental income.
The property is categorized as a retail restaurant property.
According to the listing, the tenant pays a stable base rent as well as additional percentage rent tied directly to gross sales. This structure allows for potential upside if the restaurant’s performance increases, making the property investment more appealing.
The combination of rental income from the restaurant and the property’s coastal location may attract investor interest.
Details of the current ownership of the property were not disclosed in the listing.
Situated along Cabrillo Boulevard, the property benefits from its proximity to the waterfront, Stearns Wharf, and other strong foot traffic destinations in the downtown, according to the listing.
Cabrillo Boulevard is one of the most prominent coastal stretches in Santa Barbara, connecting key destinations and drawing locals and tourists throughout the year.
Long-Term Tenancy of Chad’s Restaurant
Chad’s long-term tenancy contributes to the property’s stability, as the restaurant has operated at this location for decades and is well-known along the waterfront.
The property features kitchen equipment including three walk-ins, 600 amps of power, a liquor license (Type 41), all of which are owned by Chad’s, according to the listing.
Chad’s is a family-run restaurant that has stayed in the same family for more than six decades, according to its Yelp page.
Originally opened by Sam Battistone, the restaurant serves breakfast and lunch all day, with views of the beach.
Currently, it is owned and operated by his grandson, Chad Stevens, according to Visit Santa Barbara.
The restaurant was earlier known as Sambo’s, a name that had drawn controversy and sparked a demand for a rebrand due to its racist origins. In July 2020, the restaurant was officially renamed Chad’s, marking a major shift in the restaurant’s history, while allowing it to continue serving guests at the beachfront venue.
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“the tenant pays a stable base rent as well as additional percentage rent tied directly to gross sales”
That is just straight greed on the part of property owners.
It’s a very normal business practice. OF COURSE It’s factored into the total amount that they are paying. Sometimes business owners prefer to pay percentage rent so it protects them in winter months or events like Covid, some prefer to have a fixed amount. It’s all negotiable. It’s not greed, it’s the economy.
If you don’t know what the base rent is then how can you know it is gouging or greed?
What if it is a below market rate and then gross sales percentage? Wouldn’t that advantage/give the business more wiggle room when business is slow?
I doubt that will occur.
This sort of “give me profit but not risk” arrangement is what drove many long-time tenants out of the Calle Real Center stores in Goleta.
*Sambo’s
How many gallons of tears did you cry, STEVE, when they wouldn’t let you be racist anymore? I bet it was a lot.
Change is scary for everyone, especially when you’re not very bright.
And illiterate:
> The restaurant was earlier known as Sambo’s,
So, no need for a bogus correction.