Los Angeles County Assessor
The Los Angeles County Assessor published its annual report recently as its fiscal year runs from July 1st to June 30th. Not to be confused with the L.A. County Tax Collector (which collects your taxes), the Assessor’s office is in charge of assessing the value of taxable property in the county. This includes value of real estate parcels, business personal property, boats and aircraft per the report.
The assessor has valuable real estate information on all 88 cities within the county along with all of the unincorporated areas of Los Angeles County which amounts to $1.416 trillion in taxable property. This year, two South Bay cities made the top 10 in cities with the high percentage increase in assessed value. Coming in at #9 was Hermosa Beach with an increase in assessed values of 7.4%.
The #1 spot went to a less blogged about city (for me), El Segundo, which had a huge increase of 11.6%!
El Segundo
In El Segundo, where the total assessed valuation is, according to the office of Jeffery Prang, is $12,215,580,623 for 5177 properties, the growth rate was 11.6% – the highest of any city in the County. By comparison, see the growth rate figures below:
Assessed Valuation by Year (rate of change)
- 2017: $12,215,580,623 (11.6%)
- 2016: $10,947,287,185 (3.1%)
- 2015: $10,617,872,863 (5.9%)
- 2014: $10,025,144,400 (-2.5%)
- 2013: $10,284,261,810 (6.7%)
- 2012: $9,635,152,459 (3.7%)
Parcel Counts by Type and Year
Single-Family Residential
- 2017: 3,435
- 2016: 3,433
- 2015: 3,431
- 2014: 3,419
- 2013: 3,414
Residential Income
- 2017: 779
- 2016: 780
- 2015: 781
- 2014: 782
- 2013: 784
Commercial/Industrial
- 2017: 963
- 2016: 948
- 2015: 941
- 2014: 934
- 2013: 932
Many real estate pros around the South Bay know that El Segundo has had a fabulous run since the Great Recession, just like all of the South Bay cities. The city has surged and also slowed at times, but it tends to move in-step with its neighboring cities. An 11.6% increase though?! I decided to dig into the numbers.
El Segundo Single-Family Median Price and Sales
2017 Median Price: $1,271,750
2017 Sales: 74
2016 Median Price: $1,292,500
2016 Sales: 90
There are a few pending single-family sales that will bring up that median price in 2017. But by the look of things currently, single-family home prices are flat to lower in 2017. How could there be an 11.6% increase? Let’s see if we throw in condos and town homes…
El Segundo ALL Residential Median Price and Sales
2017 Median Price: $1,075,000
2017 Sales: 124
2016 Median Price: $1,075,000
2016 Sales: 134
All residential per the MLS in El Segundo is flat! There are 14 pending sales in El Segundo and I fudged the 2017 median price as there was a tie at $1,050,000 and $1,075,000 at the time of writing this post… but this is pretty amazing as it is almost the exact same as last year. So how the heck is El Segundo appreciating some much per the assessor? (to be fair, I am not using their exact fiscal year, but it should be close)
In a nutshell, commercial and income property have been the main drivers of the Assessor’s 11.6% report.
There have been some big commercial transactions in the city of El Segundo during the Assessor fiscal year. It has been well documented that tech has been flooding into areas of El Segundo, especially the Smokey Hollow area which is changing from light manufacturing to creative office space. Additionally, the Lakers recently completed a new $80 million training facility that likely triggered a large re-assessment. And lastly, to fuel the fire of commercial sales, a Boston-based real estate investor purchased the creative office campus known as the Apollo at Rosecrans (Manhattan Pacific’s first headquarters…a small one room office sublease!) for over $300 million which would have been assessed most likely in the prior year. That, however, most certainly influenced the Hackman Capital Group’s purchase of 888 Douglas Street, a 23-acre site owned by Northrop Grumman, for $81.5 million to convert aerospace buildings to creative office and probably develop more buildings over the coming years.
These bullish commercial bets have fueled the residential income property market in El Segundo. Take a look at the surging income property sales year over year in El Segundo…
El Segundo Multi-family Income Property Median Price and Sales
2017 Median Price: $2,210,000
2017 Sales: 17
2016 Median Price: $1,300,000
2016 Sales: 17
That is an increase of 70% year over year. Being that El Segundo is a smaller city with low transaction volume, this small set of sales not an entirely fair statistic but it does show how commercial and income property sales have been the main driver of the Assessor’s report and the increase in prices throughout the city.
Conclusion
Although the residential housing market has been flat over the last year, these extremely bullish multi-family and commercial sales are huge growth drivers. As Hackman Capital Group, Smokey Hollow, and a multitude of other high profile commercial properties begin transformation into creative office space, one can expect an influx of high paying tech jobs in the coming years. The El Segundo residential real estate market, as a result of this commercial activity, will likely benefit in a big way over the medium term.
Sources
Assessor’s E-Newsletter for Real Estate Professionals
Richard Haynes
DRE: 01779425
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