Recent Challenges Faced by Investors in Office Market Because of Tax Assessors Lagging Behind Market Conditions

Office owners are facing higher property tax bills as the gap widens between the assessed value of their buildings and their actual market value. With the office market in decline, landlords are seeing their properties lose value, leading to challenges in refinancing loans and impacting government revenue generated from property taxes. Cities like San Francisco, Chicago, and Philadelphia are already reporting substantial drops in office building values, leading to budget shortfalls and an increase in property tax appeals. The divide between assessed values and actual market values is expected to continue growing, creating financial strain for landlords struggling in a challenging market.

In a recent CoStar article, Shane Moncrief, Property Tax Principal and Practice Leader at Ryan, discusses how tax assessors are struggling to keep up with current market conditions, which creates difficulties for investors who prioritize future value and fair market assessments, especially in the office market.