The end of March was among the most active weeks for commercial real estate sales in the city of Los Angeles as buyers and sellers looked to complete deals before a property transfer levy, known as the mansion tax, took effect on April 1. Now, brokers say, the hard part begins.

More than 200 properties were recorded as selling between March 26 and March 31 with a combined sales price of $1.3 billion, according to CoStar data. The sales volume was more than five times the $231 million the prior week. And the deals that week were roughly one-tenth of all the commercial sales in the city of L.A. in 2022, which totaled $11.8 billion.

But not every Los Angeles property on the market traded hands last month, and real estate analysts say the new transfer tax is a new obstacle to completing commercial real estate sales this year. Some high-profile properties in the city of Los Angeles that didn't sell include downtown's third-tallest tower, the 62-story Aon Center, along with the roughly 1.2 million-square-foot 601 S. Figueroa St. and the historic 464,000-square-foot PacMutual buildings at 523 W. 6th St., to name a few.

Under the new tax, "we will continue to see sales decrease, and more businesses and investors will set their sights outside of the city of Los Angeles for future business," said Phillip Sample, senior vice president at brokerage CBRE.

The stakes were high for buildings to sell before April 1. The so-called mansion tax calls for a 4% levy to be applied to all properties — both commercial and residential — sold or transferred for more than $5 million. A 5.5% tax takes effect on properties sold or transferred for more than $10 million, replacing a 0.45% rate. The tax is an "excise tax on the privilege of selling a real property interest, not a tax on the property itself," according to the city of L.A.'s website.

That's a big reason the deal volume in late March was an anomaly in greater L.A., which had already seen a slowdown in sales to start the year from 2022 because rising interest rates and waning investor demand.

Sample added that the conversation between buyers and sellers is similar now to what it was before the mansion tax deadline, but he said the tax will come at a cost for future sales in the city of L.A. in the months ahead.

He's marketing multiple properties for sale, including a 156,000-square-foot industrial building at 931 E. Pico Blvd., which is among the largest properties for sale in the city of Los Angeles in CoStar's database.

Some real estate professionals are attempting to find ways to sell their properties while minimizing the new tax's effect. Harry Pflueger, principal of Newport Beach-based Maxim Hotel Brokerage, said he thinks the tax shouldn't affect the sale of The Mayfair Hotel, a property he's marketing at 1256 W. 7th St.

The hotel is under contract, and Pflueger said he couldn't go into more detail about how the deal is structured and why the tax wouldn't affect the sale.

Pflueger said, though, there will be challenges ahead for future sales.

"Nobody's happy about the mansion tax," Pflueger said. "It's a major blow to existing owners, and it's a reason for caution for new owners."

That said, there are still buyers looking to expand their property portfolios in the city of Los Angeles. Aviel Golbari, vice president of Los Angeles-based Elat Properties, said his firm is interested in buying more properties in the city of L.A. after acquiring two high-profile offices before the mansion tax deadline.

Golbari said the tax will result in fewer transactions, but buyers and sellers will figure it out in the long run.

"The mansion tax is something we're going to have to get accustomed to," Golbari said.