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25 East Mason Street

Paul Wellman

25 East Mason Street


Sonos Leasing Gobs of Downtown Property

Taking Over Samy’s Camera Location on Chapala Street; Creating Global Headquarters and Urban Campus


Friday, March 7, 2014
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In concert with its seemingly nonstop rise in popularity and sales, Sonos will soon be expanding its Santa Barbara presence in a big way. The private company — which has dominated the wireless speaker market since it started in Santa Barbara in 2002, and which boasted $535 million in revenue last year — recently announced that it has leased more than 100,000 square-feet of new space along the downtown corridor and in the Funk Zone.

Over the coming months, Sonos will move into the two-story, 22,000 square-foot building at 614 Chapala Street, the three-story, 28,000 square-foot building at 419 State Street, and the three-story, 47,000 square-foot building at 25 East Mason Street. Global facilities director Ingvar Meijers said Sonos will also be announcing a new lease on Salsipuedes Street — where the company already has offices — by next month. Right now, Sonos is headquartered on De La Guerra Street, has other small locations on Garden and State streets, and boasts facilities all over the world, including China, Germany, the Netherlands, and the United Kingdom.

The Chapala Street property is currently occupied by Samy’s Camera, which has been at the location for 10 years and is in the process of looking for a new home. According to sources close to the deal, the building was sold around four months ago, its property value was re-assessed, and its lease rate then increased. The camera store is reportedly unable to pay the higher rate, and is therefore considering a move to 1117 State Street, a 11,000 square-foot space between CVS and Anthropologie.

Meijers said Sonos intends to turn the sprawling, multiple-building Chapala Street location into an urban campus and the company’s global headquarters. Sonos will also expand into 600 Chapala Street next door, he went on, which will add another 6,000 square-feet to its floor plan. The company will keep its De La Guerra Street location in the meantime and largely transition out by October, but maintain the property’s front building after that. All of the new spaces will need renovation work, Mujers said, some of it major.

The 419 State Street space was formerly occupied by Territory Ahead’s corporate offices before the company sold to a Massachusetts-based holding firm and shuttered the location in July 2012. Sonos will use the property for its software development and customer service departments, Mujers said, explaining Sonos currently employs around 270 people in the area. That number could reach 500 in just a few years, he went on, and Sonos will likely need even more floor space by the year 2016.

Research and development for the wireless HiFi systems will be centered at the Mason Street location, Mujers went on. Like the Chapala Street property, it was recently sold to an undisclosed buyer then leased out by Sonos, which always aims to completely occupy its properties rather than sub-lease, Mujers said. The Mason Street building, referred to as the Bekins building after its original use as a Bekins Storage facility in the early 1900s, was listed for $21.5 million when it sold this week. It last changed hands in 2012 when East Mason SB LLC bought it for a reported $9 million.

Mujers wouldn’t disclose how much Sonos is paying for its many leases, saying only that the dollar amount is “significant.” He said he’s been working on the Santa Barbara deals for the last two years, and that the city afforded some rental challenges other places don’t. “We’re focusing on spaces that are 25,000 square-feet or bigger, but there’s a short list of places like that in town,” he said. Mujers explained that the company looked at four different areas for expansion scenarios — Goleta, Carpinteria, Santa Barbara at large, and downtown Santa Barbara — but settled on the heart of S.B. because it remains “part of the company culture. … We appreciate the downtown vibe.”

Eric Nielsen, public relations manager, noted that “Sonos has been part of Santa Barbara since Day 1” and that the company is working to integrate within the city as it grows. To that end, he said, Sonos will likely implement a bike-sharing program to connect its various downtown spaces, and would create an incentive plan for employees to take public transportation to work. “We’re not just creating office space,” he said, “we’re creating a lifestyle set-up that fits with the city.”

Nielsen said Sonos — which ran a Rick Rubin-produced ad during this year’s Super Bowl — is enjoying the niche it created for itself with relatively little competition, even from acoustic tech giants like Bose, Samsung, and LG. “Everything we do is done by Sonos and our team,” he said, explaining their employees often come from places like MIT and JBL. “They’re the best in the world,” he noted. Thus far, Nielsen went on, no one else has been able to “put together hardware, software, acoustics, and the Internet” the way Sonos has. Perhaps most importantly, Nielsen summed up, the company early and effectively connected their wireless speaker systems to the streaming music trend and maintains a relative lock on that area of the market.

Comments

Independent Discussion Guidelines

See, more of those tax and spend damn Liberals scaring away American tech and manufacturing industries out of expensive places like downtown Santa Barbara and California!

Now Sonos will force their employees out of their cars and into high density housing within walking distance for their employees.

O the Horror!!!

John_Adams (anonymous profile)
March 7, 2014 at 7:30 p.m. (Suggest removal)

John_Adams: What about the part where high prices forced out Samy's?
Yes, they have (for now) a place to dwell, but what about when (following the price-raise trajectory) they are forced out altogether?

It's a microcosm of what has been happening here for years: Economic Darwinism, and ask yourself why the price of doing business in Santa Barbara is so costly. The "only the strong will survive" may come to bite even you in the end. (Double entendre intended)

billclausen (anonymous profile)
March 7, 2014 at 8:42 p.m. (Suggest removal)

That's OK. People can buy their camera equipment on-line and avoid the sales tax while they're at it.

And of course, The Territory Ahead is as happy as a clam being out of SB.

Botany (anonymous profile)
March 8, 2014 at 5:05 a.m. (Suggest removal)

Glad for Sonos. But I love Samys, lots of expertise, customer service, interesting and useful inventory, rentals, and quick, sometimes immediate, service for problems, all of which is not possible 'on-line'. Samys is definitely worth the cost of tax (and more) for me. Hope Samys moves to a good space.

meneush (anonymous profile)
March 8, 2014 at 10:08 a.m. (Suggest removal)

Sonos is great but I love Samy's and hope they stay in Santa Barbara. We need a camera store in town now more than ever with Russ' gone.
You can't just buy camera equipment online (even tho it's available) and sometimes you need something done immedaitely.
In addition to selling equipment, Samy's provides expert service in repairs, techical issue (exporting/reformatting) and a host of other valuable services that cannpt be duplicated online, only with Samy's personnel and resources.
It's sad that Photography has come to seem so ubiquetous when it is indeed an Art form of the highest caliber.

Ken_Volok (anonymous profile)
March 8, 2014 at 4:35 p.m. (Suggest removal)

Don't quite understand the first post. But then again, I never really understand liberals either.

If you are going to talk about business and taxes you have to understand what your talking about in the first place. Let me explain this a little more in detail and slowly for the first poster.

Four different businesses had to either go out of business or leave the area all together for one business to buy or lease the four buildings in question. So tell me again how that works for SB?? This one business may very well work out for SB and employment but opportunities for shoppers is taking it in the a$$..

So, to answer your question about "tax and spend democrats" yes, it effects the economy, the budget and the future of California. When you lose four businesses and get one in return where going backwards. But then again, democrats rely on backwards evolution to get re-elected….

Priceless (anonymous profile)
March 9, 2014 at 9:32 a.m. (Suggest removal)

I am greatly amused by my friends here from the Whig Party who are complaining here when the free market capitalist economy works. And how they count the number of separate business as a success indicator rather than the size, payroll, and economic output of a single business.

Just admit it, the Whigs are simply upset that Sonos is setting up a bike lending system for their employees to ride around downtown instead of driving a single car.

John_Adams (anonymous profile)
March 9, 2014 at 10:43 a.m. (Suggest removal)

And all those Republican businesses pushing out smaller businesses - Walmart, Staples, Home Dept, ....

tabatha (anonymous profile)
March 9, 2014 at 11:52 a.m. (Suggest removal)

You are supposed to pay the sales tax for online purchases. Just because the company doesn't charge you for it doesn't mean you don't owe it. In the end, who really pays it? anyone?

spacey (anonymous profile)
March 9, 2014 at 1:53 p.m. (Suggest removal)

To offer solace to Priceless ... capitalism is alive and well in the funk zone.

That building on Mason St (for which Sonos currently holds a long-term lease) was just sold for $17.2M. The seller/investor purchased that building a mere two years ago for $9M.

Considering how cheap money has been, much of that difference is probably a gross gain (offset with various gain-sheltering mechanisms).

Rejoice, oh ye worshippers of trickle-down economics.

http://www.pacbiztimes.com/2014/03/03...
http://www.pacbiztimes.com/2014/03/07...

EastBeach (anonymous profile)
March 9, 2014 at 2:08 p.m. (Suggest removal)

Actually, we can thank QE for the asset bubbles (as well as cheap money) that we are currently experiencing. Supply side economics has very little to do with it.

Botany (anonymous profile)
March 9, 2014 at 2:56 p.m. (Suggest removal)

What did I miss? "Priceless" asserts that four different businesses had to either go out of business or leave the area altogether...

Well, Sammy's is apparently finding a suitable (both in terms of location and price) for its relocation and who else "had to go out of business or leave the area" for this to take place? In fact, none. Territory Ahead moved its corporate offices from Santa Barbara more than a year ago. It didn't have to do anything for Sonos to expand. What other businesses? Bekins? really. How long has that building been other than a Bekins building?

Change happens, but aside from supporting the current rent structure, Sonos seems to have occupied spaces that are or were vacant. Hardly causing others to move. Even Sammy's isn't moving because of Sonos, rather Sammy's doesn't want to pay the higher rent of the new owner.

We're fortunate to have a company like Sonos which seems to reflect Santa Barbara values and traditions.

maven12 (anonymous profile)
March 9, 2014 at 4:48 p.m. (Suggest removal)

I think John_Adams is missing the point. Sonos is a great high tech company founded by a guy who founded an earlier great high tech company. That earlier company, after a lot of international success, 'merged' (was absorbed) by a Silicon Valley firm that moved north within a few years, took their high tech jobs with them, and shuttered the Santa Barbara offices. So his latest company, Sonos, like the one before it, imports a lot of high tech workers into Santa Barbara because this is a tiny labor market, and many of the skills they need can't be found here. So when they expand and rent a lot of office space for all these imported high tech workers, that's great for low office vacancy, bike programs and the like. Oh wait, if most of their workers are non-Santa Barbarans, where are those folks going to live? Why, in that new downtown housing with no parking that you love so much! At least until they start families and want houses with lawns and garages. So what about the families you displaced from the low-income downtown areas to build that 'workforce' housing with biking and no cars? The families currently living here are mainly Latino, and have vehicles for their constructions, plumbing and gardening jobs. They sure can't do that uber-cool bike commute thing you advocate for so often! Well, who cares about them??? Make room for the urban hipster high tech workers from across the USA! And then we've become Portland, Seattle, Austin, suburbs in Boston, or the East Village in NYC.

If I am not mistaken, you, sir, are a major local Democratic Party henchman, and you advocate here for evicting the very Latino families you court every election so you can displace them with these transplanted high tech workers to fill Sonos' offices and thus prove your little urban-living, bike-commute experiment notions are 'right on'.

At least until they move to the 'burbs to start families, and start voting Republican.

Be very careful... you might get what you wish for.

dogsnsand (anonymous profile)
March 9, 2014 at 11:37 p.m. (Suggest removal)

Hey JA,

Point to the sentence in my post where I say I'm "Complaining about the free market or Sonos moving in"?

Size, payroll or economic output is NOT an indicator of success. So let's take your assessment of "Size, payroll, economic output" as success. The north county is mainly Ag. Do people like YOU work in the fields? I'm sure this is beneath you. Do these people make a living wage? I'm sure you eat what they pick. Are these people mainly illegal aliens? Yes. How many people like you travel to Santa Maria to buy goods or buy their produce straight from the fields? None.

One business buying up or leasing several other buildings is still one business. What is it about that you lib's don't understand? Businesses are leaving, have you walked downtown lately? Have you travelled outside your rose colored garden you call SB? Big businesses come and go. Remember Raytheon, Delco, major oil companies, Space industry at VAFB, etc.. It is just a matter of time when this business will leave because taxes are eating company profits. But hey JA you still will have your bike and rose colored glasses…….

Priceless (anonymous profile)
March 10, 2014 at 8:44 a.m. (Suggest removal)

dogsnsand, tell us more how clean, bicycle-boosting tech businesses moving into vacant downtown commercial space is so bad.

John_Adams (anonymous profile)
March 10, 2014 at 12:59 p.m. (Suggest removal)

As for Republican-owned businesses pushing out smaller businesses, those smaller busnisses would find a Red State much more hospitable to them because they wouldn't have to jump through all the hoops of permits, fees, regulations, and so forth.

That's why so many businesses are leaving California--known as being a very business-unfriendly state.

billclausen (anonymous profile)
March 11, 2014 at 7:04 p.m. (Suggest removal)

Ha, I have been hearing that businesses have been leaving California because of red tape and taxes for the last thirty years. If all of those foolish predictions were true, California would have an economy like Bangladesh. Instead we have one of the most dynamic in the nation.

Herschel_Greenspan (anonymous profile)
March 11, 2014 at 8:21 p.m. (Suggest removal)

Dynamic alright, if you have the money to participate.

billclausen (anonymous profile)
March 12, 2014 at 2:34 a.m. (Suggest removal)

JA... do you own a bike shop? Just curious, because you sure keep pushing the bikey-hikey thing.

Holly (anonymous profile)
March 12, 2014 at 3:04 a.m. (Suggest removal)

Holy, in answer to your question, John Adams not only owns a bike shop, but wrote this smash hit for the group Queen
http://www.youtube.com/watch?v=GugsCd...

dolphinpod14 (anonymous profile)
March 12, 2014 at 3:08 a.m. (Suggest removal)

It's called "Quincy's bikes and fun".

dolphinpod14 (anonymous profile)
March 12, 2014 at 3:10 a.m. (Suggest removal)

AH... THAT explains it!

Holly (anonymous profile)
March 12, 2014 at 3:10 a.m. (Suggest removal)

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