Property values up, but slowing in San Mateo County

While the overall assessment amount still achieves a record amount this fiscal year — which ended June 30 — tougher economic conditions have kept a tight grip on the county’s labor market.

Workforce reductions within the technology and life science sector haven’t eased as much as anticipated, with biotechnology layoffs keeping the same high pace so far in 2024 as they did in 2023 — which saw the most job cuts in roughly a decade. Continued remote work patterns post-COVID are also stalling the commercial real estate’s recovery, which is still seeing elevated vacancy rates. 

And between inflationary pressures and high interest rate environment, financing new developments, both residential and commercial, is an uphill battle. More than half of San Mateo’s approved developments are still waiting on private financing before they begin construction, and Foster City is implementing a new entitlement extension policy at the request of multiple builders struggling with securing loans and investors.  

Despite lenders’ prudence, however, developments are still in high demand and the county is well-positioned to weather the storm, according to the report. More than 22 million square feet of major development projects were either planned or under construction in both South San Francisco and Redwood City over the past fiscal year, and over 3 million square feet of commercial space was finalized in 2023. And though unemployment increased to 3.3%, it still remained the lowest in the Bay Area and well below the state average.

“San Mateo County delivered another year of impressive roll growth in 2023, demonstrating the county’s economic strength and resilience despite the significant challenges in the real estate and financial markets facing the state and nation,” San Mateo County Assessor Mark Church said in a statement. 

Life science projects comprised 30% of all major development during the 2024-25 fiscal year, with residential consisting of 21%. Some of the larger commercial spaces completed over the past fiscal year are located at 348-354 Oyster Point Blvd. and 700-900 Gateway Blvd. in South City, as well as Shoreline Court and Marina Boulevard in Brisbane. Both cities saw the highest percentage growth in assessed value year-over-year, with 7.5% and 14% increases, respectively. 

South San Francisco is also second in the county for the highest assessed property value, at $33 million, with San Mateo taking the number one spot at $38 million. Redwood City and Menlo Park took the third and fourth spots, respectively, in highest assessed value. 

The report added that total assessed values increased in all 20 cities, ranging from 2.4% to 14%.