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Mitigating Property Tax Consequences on Office Properties

Apr 15, 2024 Chad Miller, CMI
Certified Tax Representative
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The shift to remote work since the pandemic has significantly impacted the real estate market, and office properties have taken some of the biggest hits. Many companies are finding they don’t need the same amount of square footage as before. This is leading to higher vacancy rates and rising cap rates, which ultimately reduce the market value of office buildings.

A harrowing example recently reported by CoStar: A $151 million loan on an office building in New York City has been placed into special service due to “property performance issues.” The building was 99% occupied when it was purchased pre-pandemic. The occupancy rate declined to 75% in December 2022, and was down to 67% in September 2023.

This decrease in market value can also affect property taxes: Since assessed values are often based on market data, a lower market valuation could lead to a reduction in assessed value and, consequently, property taxes.

Take Control of Your Property Taxes

 The following steps can be taken to mitigate tax consequences.

  1.  Review assessed values. Obtain the latest property tax assessment and compare it to recent sales data of comparable office buildings in the geographic area.
  2. Consider a property tax appeal. If it appears the assessed value doesn’t align with the current market reality, a property tax appeal may be the solution. Remember, deadlines for filing appeals exist.
  3. Seek professional assistance. Navigating the property tax appeal process can be complex. Consulting with a qualified property tax professional can significantly increase chances of success.

By being proactive, property tax overpayment on office buildings is less likely. Remember, every dollar saved on property taxes goes straight to a company’s bottom line.


Looking for thoughtful analysis of emerging industry trends from experts in site selection and incentives? Be sure to read our latest insights.