Sonoma County hotel property tax appeals are significantly affected by key metrics such as market vacancy and market rent. These trends are summarized below.
|UNITED STATES DATA||Total||Change From 2019|
Analysis By WPA 2023
Data By STR, TE, February 3, 2023 (Published), As of December 31, 2022
2022 Year End Indicators
* Uneven, non-linear recovery across industry segments.
* Overall construction pipeline activity is down. Some December 2022 growth in construction is seen.
Sonoma County retail building property tax appeals are significantly affected by key metrics such as market vacancy and market rent. These recent trends are summarized below.
|Vacancy %||Total Available %||Total Inventory SF||Average Asking NNN Rent|
|Total Bay Area Retail Market||5.14%||6.85%||131,474,460||$32.75|
Analysis By WPA 2023
Data By CBRE Market Research 2023
Some of the largest cities in Sonoma County by population include: Santa Rosa, Petaluma, Rohnert Park, Windsor, Healdsburg, Sonoma, and Cloverdale.
Sonoma County is a coastal county fronting on the Pacific Ocean, and borders Marin County to the south, Napa and Lake Counties to the east, and Mendocino County to the North. The largest cities are Santa Rosa, Petaluma, and Rohnert Park.
The North Bay region of the Bay Area, of which Sonoma County is a part, experienced total retail vacancy and availabilities of 5.06%. This is slightly lower than the overall Bay Area average retail market vacancy and availabilities of 6.85%. Brokerage studies indicate that throughout the Bay Area, while specialty centers such as outlets and lifestyle centers are the property type logging the highest direct vacancy, when including sublease space for total availabilities, the property types with the highest vacancies are power centers and regional malls, at an average 7.77% vacancy, followed by neighborhood/community centers with an average of 7.08%.
Brick and mortar retail continues to be affected by the rising trend of online sales, which increased substantially during Covid lockdowns. Larger retailers adapted their online strategy to incorporate a clicks-to-bricks approach, making use of local brick and mortar locations as distribution hubs. However, an excess of retail space was considered already to exist in the market prior to Covid onset. Excess retail footprint became a greater issue which many retailers were forced to address during Covid and in ongoing considerations. Store closures have been considerable since Covid onset.
In downtown areas, a slower return to office has limited the recovery of store sales to pre-Covid levels. This has resulted in considerable retail vacancy in pockets of many downtown regions. A change in commute trends also has been noted to affect retailers in historically heavy commuter paths.
Rising Federal Funds rates also has significantly affected many retail markets. As the Federal Funds rate has been increasing since the second half of 2022, and as of late 2022 was expected by many economists to continue through 2023 and possibly into 2024, higher lending and finance costs are expected to affect spending power, the direction of future economic trends, and cap rates acceptable to buyers of commercial real estate.
Director, Valuation Services