C
ommercial property sales in the Los Angeles area have hit a low point, with office and industrial sales taking a significant hit. According to NAI Capital's market analysis, commercial sales in Los Angeles County declined by 18.4 percent since January compared to the same period last year. The city of Los Angeles saw an even steeper drop, with a nearly 40 percent year-over-year decline in sales, translating to $1.9 billion less than the previous year.

    Industrial and office sales were particularly hard hit, with industrial sales down 63.2 percent and office sales falling 45.1 percent. Retail property sales declined by 32.6 percent, while multifamily deals dropped 14.8 percent. NAI Capital attributed the decline to falling property values, inflation, high interest rates, and government fees on transactions.

    The city's mansion tax and Measure ULA, which went into effect last year, were also cited as contributing factors to the decline in sales. Across the county, offices were the worst-performing asset class, with a 55.4 percent decline in value compared to the same period in 2020. Despite this, the median per-square-foot sale price of offices rose 9.2 percent year-over-year.

    The brokerage warned that state legislation could further impact commercial activity in the Los Angeles market, citing Proposition 33 and AB 98 as potential factors affecting the multifamily sector and warehouse development, respectively.