The Avis Rent A Car location in Santa Barbara’s Funk Zone was purchased in a sale-leaseback transaction for more than $2.5 million, Lee & Associates announced on Oct. 11.

The transaction of the 1,350-square-foot property at 34 E. Montecito St. marked a record-setting price per square foot at $1,866, said Lee & Associates’ Rob Adams, who represented Avis along with Steve Leider while Christi Vior of Lee & Associates represented the buyer.

“The buyer, who owns property in the surrounding area, has long-term redevelopment plans for this property, which is centrally located within Santa Barbara’s hottest new district, the Funk Zone,” Adams said in a news release.

A real estate sale-leaseback is when the owner-occupant sells the land and building to an investor and it is leased back to the seller for the long-term, typically for redevelopment.

Price per square foot values in the Funk Zone have exceeded prime State Street retail locations, real estate experts told the Business Times.

What was once home to fish processing plants, wood working studios and other industrial uses has been repurposed to become one of the most active commercial markets in the region.

• Contact Alex Kacik at akacik@pacbiztimes.com.