The worst wildfires in California and Los Angeles history have devastated more than 200,000 acres across the Golden State, destroying an estimated 9,200 properties including commercial buildings, movie sets and farms in the week since they broke out.
The Camp, Hill and Woolsey fires in Butte, Los Angeles and Ventura counties prompted Gov.-Elect Gavin Newsom, the current lieutenant governor covering for the state's traveling chief executive, to declare a state of emergency. They have displaced tens of thousands of people and caused at least 48 deaths since Nov. 8, according to California Department of Forestry and Fire Protection, known as Cal Fire. The fires are still raging across the state and are not fully contained.
They are the latest in what has been the worst year on record for wildfires in California. In July of this year, the Mendocino Complex Fire, which burned 459,000 acres to become the largest fire in state history, and the Carr Fire, which overtook almost 230,000 acres, burned in Northern California.
Devastation from the fires could have a far-reaching impact on both commercial and residential real estate, according to Mark Ventre, senior vice president at commercial real estate firm Stepp Commercial. Even after the fires are controlled, it can often take a significant amount of time for commercial real estate to bounce back, such as the Tubbs fire that destroyed 5,636 structures in Napa and Sonoma counties last year.
“There is already a considerable rebuilding effort in the Napa and Sonoma valleys after their devastating fires just over a year ago,” he said.
Malibu, a primarily residential area overlooking the Pacific Ocean that is known to be a celebrity enclave, has about 2.2 million square feet of commercial real estate, much of which has not yet been able to be assessed for damage because evacuation orders issued Friday have not been lifted, according to Steve Basham, senior market analyst at the CoStar Group.
While it is too early to say what the overall impact of the fires will be on commercial real estate in Malibu, the city does only constitute a tiny fraction of overall commercial real estate in Los Angeles, so the impact to the market as a whole will be minimal, according to Basham.
However, “the localized impact could be more dramatic,” Basham said. “There are few enough retail options that if, say, one of the few grocery stores in Malibu was to burn, it could be a pretty significant inconvenience to local residents trying to resupply.”
Rebuilding efforts could be further complicated by the Trump Administration's tariffs that have contributed to a substantial increase in lumber, steel and other construction materials, and this year's hurricanes in the southeast and California fire disasters won't help matters, according to real estate data and analytics firm CoreLogic's latest construction insights report. The recent hurricanes and fires may contribute to further increases in materials' costs toward the end of the year, according to the CoreLogic report.
Officials said the Camp Fire, the deadliest and most destructive wildfire in California history, has killed at least 48 people and destroyed more than 8,750 homes, commercial buildings and other structures in Butte County since the morning of Nov. 8, including most of Paradise, California, a Sierra Nevada foothills town of more than 27,000 people 10 miles east of Chico and 85 miles north of Sacramento.
Hollywood Sets Burn
New York-based rating agency DBRS Inc. is tracking 1,510 loans encompassing 1,789 properties with a total loan balance of $44.7 billion at risk for the Woolsey and Hill fires. The agency is monitoring 35 loans backed by 48 properties with a loan balance of $2.9 billion deemed at-risk due to the Camp Fire.
Among the properties already destroyed in Southern California was filming location Western Town at Paramount Ranch in Agoura Hills in the San Fernando Valley. Filming there dates back to the 1920s. Recently, HBO’s “Westworld” was being shot there. A replica of the MASH television series set burned down in Malibu Canyon, officials said.
Meanwhile, the Santa Susan Field Laboratory, a former Rocketdyne facility and nuclear research site, was damaged in Simi Valley. Some reports say that the historic Peter Strauss Ranch, a concert venue and ranch, has been destroyed in Agoura Hills.
While residents await their opportunities to go home and check their properties, hotels in the nearby city of Santa Monica have been opening their doors to those who have been forced to evacuate. Some are even bending the rules, offering discounts and allowing some to bring pets, including the Hotel Carmel, at 201 Broadway, which is offering a $30 off the standard rooms which are often $159 a day and allowing cats, dogs and birds on the property.
“The last few days, I know it’s been really busy,” Tamara Rios, assistant manager at Hotel Carmel. “We’re usually really slow at this time in November.”
Sean Vanger, general manager at the Santa Monica Motel, at 2102 Lincoln Blvd., said his hotel has had “a ton” of residents come by even though the motel only has 33 rooms. The motel is also offering discounts and making room for residents’ pets to stay with them.
“We usually get international travelers, but because of the fires, we’ve had locals,” he said.
Other Santa Monica hotels helping local residents include: Cal Mar, Days Inn, Hotel Carmel, the Georgian Hotel, Le Meridian, Loews and the JW Marriott Santa Monica Le Merigot.
