The assessed value of property owned by International Business Machines Corp in California's Silicon Valley fell $282 million last year, making the computer services giant the hardest-hit landlord in a collapsing real-estate market, an official said on Friday.
Overall, Santa Clara County, considered the heartland of the high-tech region, saw the assessed value of some 29,000 properties drop by $4.45 billion last year, the steepest one-year fall in local history, the county assessor said.
County property assessments, which lag real estate markets, are the basis for property taxes for local public services.
About $2 billion was shaved off the assessed value of Santa Clara business properties last year amid a commercial real estate market in "chaos," said county assessor Larry Stone.
"There is an estimated 50 million to 60 million square feet of vacant office, industrial and R&D space in Silicon Valley, and that does not include 'gray space,' or vacant space owned by corporations that has not been offered for lease on the market," Stone said. "I'd say that's the definition of chaos."
"I would expect that we'll see further reduction in assessed values this year not only for properties that we reduced last year but also for additional properties," Stone said. "It doesn't seem to be getting any better."
The tech recession pushed Santa Clara County's office vacancy rate to 18 per cent last year from less than 4 per cent in 2000 when Silicon Valley was super-charged by billions of dollars of funding for Internet and other tech start-ups as well as by public offerings of tech company shares.
The county's monthly office rents plummeted since those frenetic days to an average of $2.50 a square foot last year from about $6.6 a square foot in 2000.
Meanwhile, Santa Clara County's February unemployment rate was 8.5 per cent, compared with 1.3 per cent in December 2000, according to California's Employment Development Department.
