By Bobak Kalhor, President, K2 Investment, Inc. — CA DRE #01198998 · Corporate DRE #01201662 — September 2026
Since Measure ULA took effect, 27 commercial buildings in the City of Los Angeles have sold within half a million dollars under the tax threshold. Two have sold within half a million over it. In 2019, before the tax, those numbers were 14 and 15. In neighboring cities with no transfer tax, they still look like 2019.
The data is 2,890 commercial sales from CoStar across Los Angeles County, $1 million to $30 million, in four windows: 2019, 2022, the first quarter of 2023, and the twenty four months ending August 31, 2026. Each building was checked against Los Angeles County Assessor records to establish which city it actually sits in.
- Of City of Los Angeles sales priced near the threshold, 83 percent now close under it. In 2019 it was 58 percent.
- In nearby cities with no local transfer tax, the same figure moved from 56 percent to 59 percent.
- Three city sales closed at exactly the threshold in force that day: $5,150,000, $5,300,000 and $5,400,000.
- In March 2023, the month before the tax began, city closings tripled and the median price rose 71 percent.
- The pattern appears at no other price point, and not at the $10.9 million second tier.
What is Measure ULA, and what does it cost a commercial seller in 2026?
Measure ULA is the City of Los Angeles real property transfer tax on higher priced sales, approved by voters in November 2022 and in effect since April 1, 2023. For closings after June 30, 2026, it is 4 percent of the full price when the price is over $5,400,000, and 5.5 percent when the price is $10,900,000 or more. It applies from the first dollar, not just the part above the line, and counts any debt the buyer assumes. The ordinary city and county transfer taxes, 0.45 and 0.11 percent, apply on top. It is due at recording, customarily paid by the seller, and the exemptions are narrow: qualified affordable housing organizations, certain nonprofits, and government.
| In effect from | 4% tier begins over | 5.5% tier begins at |
|---|---|---|
| April 1, 2023 | $5,000,000 | $10,000,000 |
| July 1, 2024 | $5,150,000 | $10,300,000 |
| July 1, 2025 | $5,300,000 | $10,600,000 |
| July 1, 2026 | $5,400,000 | $10,900,000 |
Measure ULA thresholds by effective date. Adjusted each July 1 by chained CPI. Source: Los Angeles Office of Finance.
The reason a threshold shapes behavior is arithmetic. An illustrative building sold for $5,600,000 owes $224,000 in ULA plus about $31,000 in ordinary transfer tax, netting roughly $5,345,000 before commissions. Sold for $5,400,000, exactly at the line, it owes no ULA and nets roughly $5,370,000. The lower price leaves $25,000 more in the seller's pocket. The full range where this happens is in Measure ULA in 2026: what sellers actually pay.
Did Measure ULA change how commercial buildings sell in Los Angeles?
Yes. Here is how we know.
We compared two groups of buildings. The first sits inside the City of Los Angeles and pays the tax. The second sits in nearby cities with no local transfer tax of their own, Glendale, Burbank, Torrance, Inglewood, Gardena, Vernon and Commerce among them, plus unincorporated county land. Same economy, same interest rates, same tenants. The only difference is the tax.
Then we asked one question of every building that sold close to the threshold, within 20 percent of it: did it close under the line, or over it? If the threshold meant nothing, the answer would be roughly half and half, in both groups, in every year.
That is 2019 against the current period, inside the city only. Half and half became 27 to 2. The wider view, across both groups and all three periods, is below.
Before the tax, the city and its neighbors look alike: a little over half of near-the-line sales landed under the line in both, about what you would expect from sellers who like round numbers. After the tax, the city moves to five out of six. Its neighbors stay put. The odds of the city's shift happening by chance while its neighbors stood still are about one in three hundred.
And three city sales in the current window closed at exactly the threshold in force on their closing date: $5,150,000, $5,300,000 and $5,400,000. Nobody arrives at $5,150,000 by coincidence.
Could this just be interest rates?
Rates rose for Burbank exactly as they rose for Boyle Heights, which is what the comparison group is for. Volume fell in both: down 46 percent inside the city from 2019 to the current annual pace, down 38 percent outside it. Both markets got quieter. But a quiet market is quiet at every price. It does not develop a cliff at one number, and only one of these markets did.
Could this just be COVID?
This is the better objection, and it is why we went back to 2019 rather than stopping at 2022. A pandemic era distortion cannot appear in a year before the pandemic, and the city's near-the-line share is 58 percent in 2019 and 56 percent in 2022. Whatever COVID did to this market, it did not build the wall.
We also checked the pandemic policy most likely to have hit Los Angeles buildings specifically: tenant protections that stayed in force in the city into early 2023 and weighed on apartment buildings. If that were the explanation, taking apartments out should make the pattern fade. Without multifamily, the city's share still goes from 63 percent to 84 percent. Without office, it holds. Investment purchases only, single-building sales only, it holds.
Does the same pattern show up at other prices?
Suppose the City of Los Angeles simply behaves differently from its neighbors for reasons unrelated to any tax. Then the same pattern should appear wherever we draw a line. So we pretended the tax started at six other prices and ran the identical test at each one.
Six pretend thresholds, six shrugs. Nothing happens anywhere in the price range except at the number the tax is attached to.
What happened in the month before the tax?
Measure ULA took effect on April 1, 2023. March 2023 is the busiest month in seven years of data. City of Los Angeles closings went from 14 in February to 48 in March, the median price rose from $3,650,000 to $6,250,000, and the share of sales over $5 million tripled.
The comparison group had a normal quarter. One tax, two opposite effects: it pulled deals forward into March 2023, and it has held them under the line since.
Is there a second wall at $10.9 million?
Not that we can find. At the higher threshold the comparison group moved more than the city did, there are too few sales up there to say anything with confidence, and our data stops at $30 million. If a second wall exists, this study does not see it, and we would rather say so than stretch.
Is my building inside the City of Los Angeles?
This is the question that decides whether any of this applies to you, and the address does not answer it. The tax follows the city boundary, not the mailing address or the zip code. Checking every parcel in this study against county records, we found buildings in East Los Angeles and Florence-Firestone with Los Angeles mailing addresses that sit in unincorporated county, outside the tax, and buildings with Marina del Rey, West Hollywood, Culver City, Gardena and Torrance addresses that are inside the City of Los Angeles and pay it. North Hollywood, Van Nuys, San Pedro, Venice, Woodland Hills and about thirty other neighborhood names are all inside the city. Sorting by the words “Los Angeles” in the address would have missed 35 percent of the city's own transactions. Check the parcel, not the envelope.
What this means for owners
The threshold is a real feature of your buyer pool. If your building is worth somewhere between roughly $4.5 million and $6 million, the number of buyers willing to transact over the line is smaller than it was, and smaller than it is three miles away in a city without the tax. Pricing conversations in that range now start with the line, not the comps.
The number moves every July 1. A building that clears the line this year may not next year, and the reverse. Timing a closing across July 1 can be worth more than the last round of negotiation.
We are not in the business of telling owners what to do about a tax. We are in the business of knowing what the market is actually doing, block by block and parcel by parcel, which after thirty years in Downtown Los Angeles is the only way we know how to work. Downtown is our proof, not our perimeter.
Send us your address
If you own commercial property anywhere in Los Angeles County and want to know which side of the line you are on, and what the threshold math looks like against a current valuation, send us the address. We will check the parcel against the assessor's records, run the numbers, and send back the answer. No newsletter, no drip sequence, one reply from a person.
Bobak Kalhor, K2 Investment, Inc. | (213) 624-0490 | bk@k2investments.com
530 E. 8th Street, Suite 400, Los Angeles, CA 90014 | DRE #01198998 | Corp. DRE #01201662
Related: Measure ULA in 2026: what sellers actually pay | Downtown LA commercial real estate market report | Homelessness taxes and LA commercial property | Current Downtown Los Angeles listings
Methodology, sources and limitations
Data
CoStar sale comps, Los Angeles County, exported September 22, 2026. Six property types: industrial, flex, retail, office, multifamily of five units and above, and specialty. Sale price $1,000,000 to $30,000,000. Recorded sales only, public record comps included. Four windows: calendar 2019 (928 records), calendar 2022 (704), January 1 to March 31 2023 (154), and September 1 2024 to August 31 2026 (1,104). Total 2,890 records, of which 2,826 were analysis eligible after removing undisclosed prices and portfolio transactions spanning multiple counties or states. Duplicate records created at quarter boundaries during export were removed (8 in 2019, 15 in 2022).
Jurisdiction
Each record was assigned using the Tax Rate Area city recorded by the Los Angeles County Assessor, not the mailing address. 2,355 eligible records were matched to assessor parcel records by parcel number and a further 319 by situs address, for 2,674 of 2,826 (94.6 percent) verified. The remaining 152, mostly multi-parcel transactions without a single parcel number and parcels whose numbers have since been retired, were assigned by mapping mailing names to jurisdictions, a method that was correct for 97.1 percent of verified records. Verification reclassified 78 records. Cities with their own tiered transfer taxes (Santa Monica, Culver City, Pomona, Redondo Beach) were held out of both groups. Unincorporated county territory is in the comparison group, since it carries no local transfer tax above the county base.
Thresholds and the tax rule
Each sale was measured against the tier one threshold in force on its closing date: $5,000,000 from April 1, 2023, $5,150,000 from July 1, 2024, $5,300,000 from July 1, 2025, $5,400,000 from July 1, 2026. Pre-ULA periods were measured against $5,000,000. Tier one applies when consideration exceeds the threshold, so a sale at exactly the threshold is untaxed and is counted as at-or-under throughout.
Specification
Near-the-line sales are those priced between 80 and 120 percent of the applicable threshold. The reported measure is the share of those sales priced at or under the threshold. For the City of Los Angeles that share moves from 57.7 percent in 2019 (30 of 52) to 83.3 percent in the current window (50 of 60), Fisher exact p = 0.0034. For the comparison group it moves from 56.1 percent (32 of 57) to 58.6 percent (34 of 58), p = 0.85. In 2022 the figures were 55.8 percent (24 of 43) and 68.8 percent (33 of 48); against a 2022 baseline the city moves from 55.8 percent to 83.3 percent, p = 0.0035. Counting all sales rather than near-the-line sales, the share priced over the threshold was 31.0 percent inside the city and 30.2 percent outside it in 2019, 40.5 and 39.1 in 2022, and 21.6 and 25.7 in the current window. The direction holds at every band width tested from 70-130 percent through 90-110 percent, and the size of the shift grows as the band narrows toward the threshold, reaching +43 points at 90-110 percent (p = 0.0003); the 75-125 percent band alone falls just short of conventional significance (p = 0.06). That pattern is consistent with a boundary effect rather than a change in what is trading.
Robustness
Excluding multifamily: 62.5 to 84.4 percent (p = 0.027). Excluding office: 58.7 to 81.5 percent (p = 0.015). Investment sales only: 54.2 to 83.3 percent (p = 0.0036). Single-asset sales only, excluding all portfolio transactions: 59.5 to 82.4 percent (p = 0.020). Verified-jurisdiction records only: 57.1 to 84.2 percent (p = 0.0025). The comparison group moves by between +2 and +8 points in every cut. Placebo thresholds ($1.5M, $2.0M, $2.5M, $3.0M, $3.3M, $8.2M) were chosen so that their 80-120 percent bands do not overlap the real bands ($4.0 million to $6.48 million across all periods) or the tier two band; that constraint leaves room for one placebo above the real threshold. Placebo shifts ranged from -2 to +8 points, none with p below 0.30, against +26 points at the real threshold.
Portfolio sales
CoStar returned multi-parcel transactions as single records at the transaction price. Measure ULA is assessed on the consideration stated in each recorded instrument, so whether a multi-parcel sale is one taxable transfer or several depends on how it was papered, which the data does not show. Results are therefore reported both with portfolio sales included (the headline) and excluded (the single-asset cut above); the finding holds either way.
Price levels
Median sale price in the comparison group was $2,825,000 in 2019 and $2,702,500 in the current window, so this segment has not inflated. Running the 2019 baseline against a price adjusted threshold of $5,226,642 gives a city shift of +35.5 points (p = 0.0001). Sliding the 2019 threshold from $5.0 million to $5.3 million produces shifts between +21 and +32 points, all significant; at $5.4 million, today's nominal figure applied to 2019 prices, the shift is +17 points at p = 0.07.
What the data does not see
Only recorded sales of real property appear. Transfers of interests in the entities that own property do not appear as sales in this or any public record dataset, whether or not they are taxed, and we make no estimate of them. There is no coverage between April 2023 and September 2024. Counts near the line are small, which is why we report them as counts. CoStar's capture of public record sales may differ across years, which is one more reason to rely on the comparison group rather than on raw volumes. The first quarter 2023 window is reported month by month because its near-the-line counts are too few to support a share; the March 2023 comparison group share over $5 million was 35 percent and its median $3,275,000.
Other published work
The RAND Corporation reported in 2026 that Measure ULA reduced high value transactions by 31 percent overall and multifamily and commercial transactions by more than 46 percent, against $1.19 billion in revenue collected. The UCLA Lewis Center, in work by Michael Manville and Mott Smith, found commercial sales down by as much as 50 percent. We have not found a published price band distribution or a jurisdictional comparison, which is what this study adds.
Disclaimer
Published September 2026. This is general market information from a licensed California real estate broker. It is not tax advice, legal advice or an opinion of value, and nothing in it should be read as guidance on how to structure a transaction. The net proceeds example is illustrative and ignores commissions, prorations and other closing costs. Measure ULA rates, thresholds and exemptions change. Confirm your own situation with your CPA, your counsel and the Los Angeles Office of Finance before acting.