Principal Steve Thompson Unveils Trends in Commercial Property Tax Appeals

The commercial real estate landscape is undergoing a seismic shift as property owners in major cities across the United States aggressively pursue tax appeals amidst declining office values and uncertain futures for the sector. With assessments often lagging behind market realities, owners are pushing for significant reductions, triggering a cascade of potential revenue losses for municipalities already grappling with budgetary uncertainties. From New York City to San Francisco, owners are digging in their heels, leading to a looming crisis in municipal finances as tax revenues erode. The traditional models for assessing property values are under scrutiny, with cities facing the prospect of having to adjust tax rates or cut services to compensate for the shortfall. This trend, while gradual, signals a fundamental shift in city finances that may prove difficult to reverse, posing challenges for policymakers and urban economies alike.

In a recent Commercial Observer article, Steve Thompson, Principal at Ryan, highlights the widespread trend among commercial property owners in major cities like New York City to appeal tax assessments because of their significant financial impact, particularly as office values decline.