This report examines the factors that determine commercial rents in 12 California counties. It explores the relationship between commercial and industrial rents and the reassessment of commercial property values, accounting for other factors that shape rents.
Commercial rents are driven by location, local market conditions, the nature of a local economy (high-wage areas are associated with higher rents), and building age and size.
For average commercial properties, reassessments do not increase rents. Office buildings have a small relationship between reassessments and rents. Reassessing a 20-year-old office building to current market value could lead to a one-time rent increase of roughly 2%.