MARTINEZ — Plunging values for numerous commercial real estate sites such as office buildings have undermined property values in Contra Costa County, a yearly government report shows.
Although property values are rising in Contra Costa County, the values rose at their slowest pace in three years, a sign of weakness for sectors such as commercial real estate.
NoMa Apartments, a 135-unit apartment complex located at 1910 North Main Street in Walnut Creek. (Google Maps)
The faltering increase in real estate values could squeeze how much revenue municipal, regional and county agencies receive from property tax revenue in Contra Costa County.
The total assessed value for properties in Contra Costa County was $278.84 billion for the 2024-2025 assessment roll, according to a report released by the County Assessor’s Office.
The Jan. 1, 2024 value for Contra Costa County properties was up 4.2%, or $11.16 billion, compared with the year before. The current assessment total represents a record high for property values in the county.
Still, some signs of weakness have emerged in Contra Costa County, a review of county assessment reports for recent years show.
The 4.2% increase was the slowest rate of annual gain for property values in Contra Costa County since the 2021-2022 assessment period of three years ago, which applied to property values as of January 2021.
The sluggish increase for property values in this part of the East Bay arrives on the heels of a forbidding landscape for Bay Area office building values.
Contra Costa County didn’t escape the brutal trends for commercial real estate.
“The office building business has fallen off a cliff,” said Contra Costa County Assessor Gus Kramer said.
Apartment and retail building values have also wobbled.
Here are a few examples of property transactions in 2023 that point to weaker values for commercial real estate:
— Concord Corporate Centre in Concord was bought for $20 million, a jaw-dropping 68.5% nosedive from the office building complex’s value in 2017.
— One Concord Centre in Concord was bought for $40.5 million in August 2023, a 42.6% plunge from its value in 2017.
— NoMa Apartments in downtown Walnut Creek was given back to the residential property’s lender after the developer of the apartment complex defaulted on a $79.8 million loan.
Concord, Walnut Creek and San Ramon showed the weakest increases in assessed values, the report showed.
Assessed values rose 1.5% in Walnut Creek, 1.7% in Concord and slightly less than 3% in San Ramon.
Cities with the largest increases in assessed value included Martinez, Oakley, Antioch and Richmond, the County Assessor’s Office report showed.
Here’s how the cities with the strongest increases in assessed values fared:
— Martinez, up 6.1%
— Oakley, up 5.2%
— Antioch, up 5%
— Richmond, up 4.7%
Property tax revenues depend on the assessed values of the parcels that are involved.
This means a sluggish pace for value increases could also crimp a big chunk of tax revenue that flows to government and regional agencies in Contra Costa County and its cities.
“This could affect city and county budgets,” Kramer said. “It significantly affects services that cities and the county provide.”