SAN JOSE — “Stagnation” in commercial real estate has hobbled growth in assessed values for Santa Clara County real estate, producing the smallest rate of increase in more than a decade, a new report states.
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The annual assessment roll for Santa Clara County did manage to reach an all-time high of $725.7 billion — yet the 4.15% increase marked the slowest annual increase in combined values since 2012, the County Assessor’s Office reported.
“The stagnation was largely due to ongoing challenges in the commercial real estate market,” the Santa Clara County Assessor’s Office stated.
Waves of slumping values, loan delinquencies and foreclosures have haunted hotels, office buildings, apartment complexes and even vacant land throughout the Bay Area, including Santa Clara County.
The latest values included in the new 2025-2026 report from the Assessor’s Office marked the first time the assessment roll topped $700 billion. The prior year’s 2024-2025 report disclosed an assessment roll with an aggregate value of $696.79 billion.
“An increasing number of office buildings are selling for less than assessed value, and foreclosures from delinquent loans are becoming more frequent,” the County Assessor’s Office stated.
The real estate value slump has prompted commercial owners to seek relief in their property tax costs by appealing the valuations of the parcels they hold.
An estimated 98% of the $145 billion of assessed value under appeal is commercial property, according to Santa Clara County Assessor Larry Stone, who recently announced his retirement.
The effects of slumping property values extend beyond the owners of real estate. Property value trends can imperil revenue for an array of public agencies.
If real estate values turn soft in a region, the decline could impede a crucial revenue stream for cities, counties, regional agencies and school districts.
“We expect to receive a greater number of commercial property assessment appeals filed this year, which may result in assessment roll corrections reducing the value of the assessment roll,” Stone said.
Making matters worse, some developers have slowed or scrapped numerous projects that were expected to redevelop existing sites and produce higher values.
Reduced property sales and value, along with the sluggish pace of new construction, could coalesce to curb growth in assessment rolls in the next few years.
“The long-term outlook for the region is good,” the Assessor’s Office stated. “With 80% of all tech research and development occurring in Silicon Valley and the headquarters of three trillion-dollar companies — Apple, Microsoft, and Nvidia — the global attraction of the region will not change anytime soon.”
