Our client purchased a large commercial property consisting of over 100,000 square feet of office space. The long term vacancy rate was over 50%. We initiated assessor discussions and an appeal of value to cut their annual tax burden by $85,000.
At the beginning of our discussions with the Assessor, we were getting hung up on the fact that the current property owner paid a very high price for the property just a few years ago. We had to break down that barrier by proving that the market conditions had changed, and a better indicator of value was based on the potential income that the property could command in the current market.
Throughout the appeal process, we kept value discussions alive by providing lease data and offering a visit / tour of the property. Many of the leases were expiring in the near future, and the property owner would need to spend money to replace those tenants. During the property visit, the Assessor visually experienced the current state of the space and could better understand that in order to attract tenants, many improvements / renovations would need to be made to the space.
The potential income and vacancy struggles supported a reduction of value, but that wasn’t enough for the Assessor to authorize a reduction of value. We researched sales of similar competing properties and showed that a potential buyer wouldn’t pay any more for our client’s property than the cost to acquire a similar substitute property. The results were worth the effort. We were able to reduce the assessed market value down to $12,000,000 from over $15,500,000. Our process and efforts are the same for properties of all sizes. We’ll achieve the same results for your properties.
