Overview:
Colliers offers state of the multifamily investment market; Jay Ferro, owner of Kyle's Kitchen timeline for moving to the Target Shopping Center
The Anchor Rose restaurant in the Santa Barbara Harbor has closed, ending a two-and-a-half-year run at the iconic spot on the waterfront.
The restaurant replaced the former Endless Summer Cafe. Santa Barbara Waterfront Director Mike Wiltshire told the News-Press that the leases for the first and second floor of the building, 113 Harbor Way, expired on Dec. 31, 2025.
“They are in the process of vacating the space,” Wiltshire said. “We have had a Request for Proposals advertised for the last few weeks and will be evaluating possible new tenants over the coming weeks and months.”
Wiltshire said waterfront vacancies are rare.
“Even through COVID the Waterfront remained at 0% vacancy with all tenant spaces filled,” he said. “We have had a couple small offices change hands over the last year. But this is a rare occurrence to have a large vacant restaurant tenant.”
The Anchor Rose served fish and chicken meals, along with cocktails and beverages. It also hosted various community events. The restaurant is just a few steps away from Brophy Bros., one of the most popular restaurants in the city, always with a line to get in.
The departure of Anchor Rose is the latest shakeup to hit the waterfront in recent weeks.
The owners of the Harbor Restaurant are locked in a legal battle with the city of Santa Barbara over the lease terms and back rent. Owner John Thyne sued the city, claiming the rent for the restaurant was “unconscionable.” Thyne and his business partners bought the restaurant in 2022, but the lease agreements were signed in the 1990s, and Thyne contends in court documents that the rent should be reduced to match current market conditions.
In return, the city of Santa Barbara has filed a lawsuit to claim back rent.
According to the city’s marketing brochure, the Anchor Rose has 2,954 square feet of interior space and 931 square feet of patio space.
“The property presents a rare opportunity for a restaurant to occupy a premier space in the heart of the Santa Barbara Harbor, offering unmatched visibility, combining scenic harbor views, foot traffic from boating enthusiast as well as a diverse group of visitors, creating strong potential for a distinctive, high demand restaurant concept,” the brochure states.
Colliers Apartment Real Estate Sales Update
Colliers released a report this week showing the state of multifamily apartment sales in 2025.
About $70 million in closed transaction volume across 18 reported sales of five units or more took place in the city of Santa Barbara in 2025.
The high volume occurred “even as buyers adopted a more selective, fundamentals-driven approach amid rising operating costs and renewed discussions about rent control,” said Mike Lopus, vice president of Colliers.
The city of Santa Barbara’s multifamily assets traded at an average cap rate of approximately 4.9% and an average price per unit of roughly $395,500/unit.
Some transactions according to Lopus:
A 29-unit property on Oceano Avenue sold for $21.15 million, at an expected rate of return of about 5%.
A five-unit property on the 400 block of West Sola Street sold for $1.25 million off market.
An apartment building with 16 units on the 600 block of East Victoria Street sold for $5.85 million with a cap rate of 4.23%, according to Lopus.
A six-unit property on the 600 block of Olive Street sold for $3.65 million, with a cap rate of about 5.69%.
“The transaction reflected strong in-place income with minimal rent upside, supported by solid income and a property that required no additional investment to reach market rent,” Lopus said. “Buyers are willing to pay a premium in this market if the property’s quality and returns justify that premium.”
Lopus said that rent control discussions in 2026 will shape buyer sentiment.
“While regulatory risk has long been part of the Santa Barbara market, investors are now underwriting more conservatively, recognizing that achieving rent growth may take significantly longer under a more restrictive regulatory framework,” Lopus said. “As a result, buyers are prioritizing properties with strong in-place rents, a favorable unit mix, and minimal
execution risk, while discounting assets that depend on turnover or long-term repositioning for value creation.”
Kyle’s Kitchen Update
Jay Ferro, the owner of the Kyle’s Kitchen, contacted the News-Press to clarify some “rumors,” regarding the future of his popular restaurant franchise.
He said he chose not to exercise his five-year option for the lease at 7000 Hollister Ave. and wanted “a place that was more involved with the community and less isolated from other businesses and restaurants.”
So he plans to move to the Target Shopping Center, next to the IndoChina Market, taking up two spaces.
“We are mostly excited for our son, Kyle (now 21 years old) and other special needs adults who are employed at Kyle’s, as it will give them a place to work and call home for the next decade and more,” Ferro said.
He signed a lease last summer and expects to open in late Spring.
Kyle’s Kitchen just celebrated its 10-year anniversary and also its Kyle’s Gives Back program where they have donated more than $300,000 to local special needs organizations. Kyle’s Kitchen closed a Santa Barbara location two years ago, but still runs a restaurant at 5723 Calle Real in Goleta.
Ferro said the out-of-town chicken franchise Raising Cane’s will take over the Hollister spot in early 2027.
“They are a fast growing chicken concept that is very popular with the younger demographics and I’m sure will do great in Goleta,” Ferro said.