$1.9B of Commercial Properties in Palisades, Eaton Fire Zones

Recent analysis estimates the Palisades and Eaton fires in Los Angeles have affected 4.5 MSF of commercial property worth $1.9B. The hardest-hit areas include many multifamily and retail properties, with significant losses in Pacific Palisades and Altadena.

Scope of Damage

To be more specific, using data from California’s Department of Forestry and Fire Protection and CoStar, around 4.5 MSF of commercial property lies within the fire zones of the Palisades and Eaton fires.

These properties, valued at $1.9B before the disaster, include multifamily apartments, retail centers, and office buildings. An additional 23.6 MSF of commercial space valued at over $7.8B is located in evacuation areas near the fire perimeters, indicating the potential for broader economic disruption.

Palisades Fire Zone

The Palisades fire heavily impacted the Pacific Palisades neighborhood, a high-value area dominated by multifamily and retail properties.

• Multifamily Losses: Over 30 multifamily properties, primarily upscale apartments near Sunset Boulevard and Pacific Coast Highway, were affected.
• Retail Destruction: Over 600 KSF of retail space, including high-end boutiques, coffee shops, salons, and banks, around the Pacific Palisades Village Green, was damaged or destroyed.
• Historic Loss: One notable casualty was Anderson Real Estate’s historic Spanish Colonial Revival mixed-use property, The Business Block.

The fire also affected around 25 office buildings, with evacuation zones threatening another 151 offices, 197 retail properties, and 134 multifamily buildings in the area.

Eaton Fire Zone

The Eaton fire perimeter in Altadena was similarly dominated by multifamily and retail properties, though the area is characterized by smaller-scale and older buildings.

• Multifamily Properties: The fire zone included 12 apartment properties with 10–50 units, many built before 1965 with limited amenities.
• Retail Space: Over 270 KSF of retail space, which houses essential services like discount grocers, pharmacies, and fast-food restaurants, was affected.
• Broader Impact: Much of the surrounding commercial property—worth 3–4x more than the property in the fire perimeter—falls within the evacuation zones.

Economic Implications

The Palisades and Eaton fires highlight how vulnerable CRE can be to natural disasters, particularly in high-density urban and suburban areas like Los Angeles. 

Multifamily and retail properties, which comprise a significant portion of the affected inventory, are among the most crucial sectors for local communities in general.

Additionally, high-value assets in affluent areas like Pacific Palisades, where tenants rely on premium locations, may face redevelopment challenges as owners and investors assess their losses.

What’s Next?

As property owners, tenants, and local governments work to recover, the Palisades and Eaton fires are a stark reminder of the challenges of managing real estate in the face of growing environmental risks.

The fires could lead to stricter building codes and disaster-prevention measures for commercial properties in California, particularly in high-value urban and suburban markets.