Search Results for '2010 property tax reduction form'
Urgent Message-California Property Tax Relief
Tax Help
May, 2010. The market appears to be bottoming out. At least, so say the gurus. But don’t you bank on it. CAPTA believes we are currently in the eye of the storm, with the 2nd half approaching rapidly. It is precisely at this time you need a professional tax reduction company to guide you through the coming, actually the continuing commercial real estate recession.
California is in a real estate crisis and indeed, an economic crisis the likes of which have never been seen in history. Major California commercial property tenants such as Mervyns, Hollywood Video, Levitz, Sharper Image, Performance Team Freight, Linens n Things and Circuit City have recently filed for Bankruptcy. It was only a few short months ago that one of the safest bets in Real Property Investment was a NNN tenant such as Circuit City. Today, owners of such leases are scrambling to sell their vacant big box space to nonexistent buyers. So goes conventional wisdom.
You are at this site because you realize that now more than ever before, commercial property owners and managers must streamline their expenses and prepare for a commercial property value decline that is just now becoming evident. Read the paragraph below from “CoStar Group, #1 Commercial Real Estate Information Company” written in May of 2009:
Retail Space Availability Reaches All-Time High
The nation’s retail market posted negative quarterly net absorption for the first time, along with the highest vacancy and availability rates, since CoStar Group began tracking retail trends in 2000, according to the Bethesda, MD-based company’s first-quarter 2009 retail review and forecast.
CoStar’s research shows that the average days a retail space is listed on the market as “available for lease” has continued to rise — from 174 days in first-quarter 2006 to 370 days in first-quarter 2009…Unfortunately, CoStar is forecasting that the retail vacancy rate will continue to climb…Spivey showed that the average sale price per square foot has dropped from $235 to $125 since the recession started, while the average time a property spends on the market has increased from about 255 to 334 days.
CoStar forecasts that sometime in the next two to three years, the average retail cap rate could hit a level that is 400 basis points higher than where it was at the start of the recession. If that happens, the average cap rate would be around 11% (a high not seen since 1994), which would create better margins for buyers and should fuel transaction activity. Additionally, CoStar forecasts that the average sale price per square foot could go as low as 70% off pre-recession pricing and sales volume could end up as much as 90% off pre-recession activity, sometime in the next two to three years.
Okay, things are bad nationally but what about California? Here it is:
Spivey identified Los Angeles and Atlanta as having more excess retail inventory than any other markets…The markets with the largest first quarter increase in the average retail vacancy rate: Las Vegas (+154bps), South Bay / San Jose (+113bps), Baltimore (112bps), Inland Empire CA (+111bps), Southwest FL (+98bps), Phoenix (+94bps), Atlanta (+94bps), Sacramento (+89bps), Oklahoma City (+82bps), and Orange County CA (+82bps)…During first quarter, the markets that saw the largest net amount of retail space become vacant, as a percentage of total retail rentable building area (RBA), in order, were: South Bay / San Jose, Las Vegas, Inland Empire CA, Sacramento, Pittsburgh, Baltimore, San Diego, Phoenix, Oklahoma City, and Nashville.
That is the nature of the future of retail. But maybe you own apartments or industrial or office buildings. Then you know that as goes residential so goes retail so goes the rest of the commercial market. It’s one big game of follow the leader. While there has been relatively good news in the commercial sector until last year, the tide is currently changing.
Make no mistake; there is a problem, a big problem in the commercial real estate market similar to what just happened and is currently happening in the SFR market. Obviously you understand the need to be proactive in the face of this problem. The question we need to answer for you is why use California Property Tax Associates to assist you with this problem. What sets us apart from our competitors?
We Are Property Owners and Developers
At California Property Tax Associates we understand the problems of commercial property owners, managers and developers because our partners are commercial property owners, managers and developers. In addition to starting to work in the area of property tax appeals and reassessments in 1989, our associates have various past and current experience building residential development and commercial properties, as well as leasing experience as landlord and manager in the California property market. You will not be turning your property tax issues over to ‘form filers’ as many companies are, but to a group of people led by commercial property owners and managers experienced in owning and managing commercial properties. We understand this business from the inside.
And one more very important thing. Again to quote Andrew Florance, President and CEO of CoStar Group, “When the market is moving this rapidly you have to switch gears and look at it from a different angle.” He was talking about the fact that the Office Vacancy rate is not showing the real situation in the Office space sector. But his statement is much more far reaching.
Think Outside The Box
We hate to use this worn out expression but it is exactly what is called for in our current California Property Tax Assessment / Reassessment situation. The tried and true, follow the book procedures of the past need to be reinvented with each case. Can you get a loan like you could 2 years ago? Can you count on real estate appreciation like you could 3 years ago? Can you count on Chevrolet, Chrysler or Ford like you could a few months ago? The answer is a resounding NO! Neither can you approach a Property Tax Assessment Appeal case like you would have just a few years ago.
In the last year there have been many changes in the Assessment Appeals arena. Appraisal methods used for the past 14 years are being replaced with ’shoot from the hip’ thinking. To prepare for an Assessment Appeal in California Counties is in many ways like an unscripted debate, where common sense and proving ones case in real life are becoming more important than following ‘the rules’. That’s what Mr. Florance is saying above: “When the market is moving this rapidly you have to switch gears and look at it from a different angle.” And that’s what we do at California Property Tax Associates.
Experience, Knowledge and Common Sense
Our experience started in the last serious downturn in the market back in the early 1990’s. We worked within our knowledge of the Revenue and Taxation Code, the Assessor’s Handbooks and California Assessment Appeal procedures, and, based upon our extensive experience representing thousands of Clients and working Statewide, we developed strategies to maximize our Clients Property Tax Savings, Credits and Refunds.
The result? California Property Tax Associates is on the cutting edge ready to put our experience buying, building and managing real estate to work for you. We will represent you to reduce your property tax liability by using our experience and knowledge of the Property Tax Assessment Appeals system in California. And the best part to you? If you do not receive a property tax savings, credit or refund, you owe us nothing. No Savings; No Fee!
Contact us at (909) 867-5000 immediately with any questions or go to our Frequently Asked Questions page. Or if you’d rather, just click here to CONTACT US by email and we will call you. But don’t put this decision off; deadlines are rapidly approaching.
2009-2010 State of the California Real Estate Market
Map of California Counties
Updated November 2009 -The commercial real estate market indicators continue to slide as the market itself is held hostage to the ‘crisis management’ of the U.S. Government. Though we have seen recent encouraging improvement in the financial markets the future remains uncertain as financial gurus inside and outside the government continue to make decisions in an uncertain time with unknown consequences. Never has it been more important for you to protect the bottom line than it is today. As stated by Andrew Florance, President and CEO of CoStar Group, “When the market is moving this rapidly you have to switch gears and look at it from a different angle.” California Property Tax Associates is that angle.
California Commercial Property Tax System
California is the only state in America that, under Proposition 13 limits the fair market value the Assessor may place on the Assessment Roll each year. There are strict rules which must be followed to ascertain the Assessed Value initially and then likewise for adjustment each year. When commercial properties appreciate that is less of a problem for the property owner, but when commercial property values decline, reassessment is necessary. However, the Assessor is under no requirement to reduce values. Additionally there is widespread disagreement over what methods to use for commercial reassessment and revaluation. Lastly, the very office responsible to cut the property assessments is working under fear that lost revenues for the government (tax savings to you) results in job losses and budget cuts for them.
You need someone who can take the time to sort through the issues. Someone who has the experience and contacts necessary to get the job done, achieving maximum results. You need an expert.
Why California Property Tax Associates?
Simply stated, we are the experts in this business. For commercial property, whether apartments or office buildings, shopping centers or industrial, warehouse or distribution center, gas station or retail center, or even vacant residential development property we are the solution.
- California Commercial Property Experts
- Experience back to 1989
- Contingency based; No savings, No fee
- Assessment / Reassessment / Appeals
- Full service representation – just give us your parcel numbers
- We file all required forms
- We communicate directly with Assessors Office
- We analyze and prepare valuation of the property
- We negotiate settlement
- We attend appeal hearings if necessary to secure reassessment
- We follow the process to secure you a property tax savings, credit or refund
YOU DON’T PAY ANYTHING UNTIL YOU RECEIVE A PROPERTY TAX SAVINGS, CREDIT OR REFUND!
What kind of results can you expect from us? That depends on a number of factors. But we have secured reductions for our Clients, large and small in the past several months such as a 500+ unit Apartment Complex in Central California, assessed at $37.7 million and reduced to $28.7 million. A $9 million reduction. And a $93,000 increase in bottom line profits! Another Client with a property he didn’t think had an opportunity. We took it nonetheless and secured a reduction to $15.2 million–from an original assessed value of over $36 million–for an annual savings of $226,000.
Please call us immediately to begin the process at (909) 867-5000. Time is critical as once deadlines pass all opportunity is lost until the following year. If more convenient for you, please leave your contact information and we will be happy to call you.
Comments or questions are welcome.
Property Tax Appeal Actual Case Study
ARTICLE
TITLE: California Property Tax Assessment Appeals-An Actual $8.4 million Case Study:
By: Jim Guffey, Partner CAPTA (jim@capta1.com)
June 25, 2006 –Running Springs, CA: In September of 2001 at a time when most property owners were seeing appreciation of their property values, I prepared a case before the Assessment Appeals Board in a large Southern California county. The property was an $8.4 million assessed Assisted-Living Apartment Hotel. I had successfully won reductions of this property’s value in years prior but the appraiser I was dealing with at the County Assessors Office refused to reduce the property’s value any further, citing the rise in commercial property values as his reason. My company had performed property tax reduction work on several of this particular owners properties with great success and he asked us to work with this property as well.
After meeting and talking with the appraiser and finding that he refused to consider a reduction in the assessed value, we were forced to the next level of a formal Assessment Appeals hearing before a three-member Assessment Appeals Board. The county has up to two years following the filing of the appeal to hear the case and we were close to the deadline when we attended the hearing.
The following is the actual case study of an assisted-living apartment complex located in Southern California. The Assessment Appeal covered the year of 1999\2000 for the lien date of January 1999. Wherever possible the actual case is presented. Valuation numbers have been rounded to the nearest $100,000.
Property Location: Southern California
January 1999 Assessed Value $8,400,000
Case Won-New Value $6,500,000
Actual Client Savings (Two Years) $ 43,000
CASE
The subject property is located at XXXX. Known as the XXXX Retirement Hotel it is situated on just under 3 acres and was built in phases starting in 1985 and ending in 1991. Constructed of wood frame with stucco exterior, the six buildings range in height from two to four stories with three buildings featuring elevators. One building has subterranean parking and all the buildings are sprinklered.
The buildings house 187 units (78,201 sq.ft.) as well as the common areas, including dining room, administrative offices, lounges, recreational and activity rooms and hallway bathrooms (43,343 sq.ft.). All six buildings are connected, and all rooms have air conditioning via wall units. Most of the units have no kitchen facilities; 10 of the larger studios do. All units have emergency pull cords in the living area as well as the bathrooms.
INDUSTRY
The housing industry for the elderly can be classified by three major types of buyers: the active seniors, intermediate seniors, and the senior who needs constant care. The first group, active retirees, want recreational amenities with the housing they buy. Intermediate seniors want a congregate-type of lifestyle that allows them independence yet gives them the opportunity to take part in quiet activities with arranged transportation and supervision. And retirees who need constant care are concerned with medical assistance. The subject property is generally targeting the intermediate retiree.
From a real estate and financial perspective housing for the elderly is complex and difficult to analyze as it usually represents a combination of other businesses and very high expenses. The major types of homes for the elderly include:
1) Senior Apartments: Apartment units set aside for active seniors. Typically these are apartments with an age restriction on residents. Stairs to upstairs units, parking spaces for each resident, and very little common area improvements are the norm. No supervisory or support services are offered. These developments have expenses, vacancy and cap rates very similar to any other apartment complex.
2) Congregate Housing: Specially planned, designed and managed multi-unit rental housing with self contained apartments. Supportive services such as meals, housekeeping, transportation, social and recreational services are sometimes provided. In California these are not licensed and have moderately greater expenses due to the increased services. Cap Rates are generally higher than apartments as well.
3) Assisted Living: Group living arrangements that provide staff supervised meals in a dining room, daily maid service, Registered Nurse on site, personal care (assistance with bathing, medication, incontinence, etc.) and private and shared sleeping rooms. Amenities such as Beauty Shops, Guest Accommodations and Emergency Pull Chords are typical. These facilities are licensed and must meet designated operating standards including minimum staff requirements. Vacancy rates vary and expenses are high. Cap rates are high as well because of the risk of running a complicated business with so many different functions (medical, dining, entertainment, nursing, etc).
4) Care Facilities (skilled nursing): Skilled nursing facilities are commonly known as nursing or convalescent homes. Around the clock licensed nurses and aids provide medical care and are generally one step below a full acute care hospital.
The subject is a State Licensed Assisted Living Retirement Hotel (#3 above).
SUBJECT ANALYSIS
Entry is made into the subject by walking through a large lobby to a reception area. The large restaurant style dining room is located off this lobby and one of the numerous libraries is opposite the dining room. Throughout this complex are over 44,000 square feet of common area (1/3 of the total square footage), including dining rooms, TV rooms, family rooms, craft rooms, exercise rooms, laundry rooms and bathrooms. At any time of the day or night guests are free to use the rooms to exercise, read, participate in crafts or group functions, or just rest while walking from the dining area to their rooms. Guests wishing to visit the pool area must be accompanied by one of the many staff members required by law to be on site.
The hallways are similar to a hotel with elevators placed at strategic locations for guests’ convenience. A number of ramps are also located in the building. Inside each room there is a living area, closet space and bathroom. Emergency pull chords summon help from staff in an instant (a full time Registered Nurse is also on site). Several units have been combined to form one larger unit, and 10 have kitchen facilities.
All residents receive maid service daily as well as all meals and snacks served to them by staff in the dining room or at the 24-hour snack center. Exercise, crafts, and other activities are supervised and offered daily and there are numerous trips set up by Arcadia Gardens to various local sites. A full time RN is also available for medication assistance. 24 hour Security is provided. Subterranean parking is provided although few are able to drive (58 spaces for staff and up to 200 residents). Each of these services is included in the base room rate as well as all utilities except phone.
As can be seen by the above subject analysis there is no way to compare an Assisted Living Retirement Hotel with a property type that does not share the same overhead and risks. This business is set to explode as the baby boomers reach retirement age in the years to come (starting around the year 2010). But currently there are many players poised to take advantage of the coming boom and a current saturation in the marketplace. Few properties are changing hands, making it difficult to find comparable property sales.
At this point in the case we presented substantial information as to market rents and expenses as well as presenting and analyzing the subjects income statement’s over the past several years. We concluded with several approaches to value and reconciled the approaches into a request for a value of $6.25 million.
The day of the appeal I arrived at the hearing and informally spoke with the appraiser from the Assessor’s Office. We notified the board that we were both present and ready to present our cases, at which time we went outside and informally discussed the information we were going to present to the board. Upon seeing my case presentation and the information contained therein, the appraiser and I mutually agreed to a value of $6.5 million which he agreed to carry for two years. Upon appearing before the board the appraiser notified them that there had been a stipulation agreed upon in the board formalized it, resulting in a savings to our client of over $43,000.
It is extremely important when considering a property tax reduction company to ensure that the agents representing the property owner actually understand the system, appear at the hearings and argue cases successfully. You should beware of companies who file papers and wait for results. These companies do little work for the money they earn and seldom achieve maximized results. As in the case presented above, the appraiser working for the Assessor’s Office refused to lower the value until he saw the case I prepared and understood that we had done our homework and represented our client in a professional and efficient manner.
You can find out more about California Property Tax Associates by visiting their website at www.capta1.com.
SUMMARY: An actual Property Tax Assessment Appeals Board case study of an $8.4 million Assisted-Living apartment complex in Southern California, the subsequent appeals hearing and the annual tax savings passed on to the client.
BIO: Jim Guffey is a real estate developer who owns commercial and residential properties in Southern California. In 1989-1990 he started one of the first full-time property tax consulting companies in California. At a time very similar to today he built this property tax reduction Company into a successful venture representing property owners in assessment reductions informally and before the Board of Appeals throughout California. Jim is the Vice President Of Strategic Oversight at California Property Tax Associates. (www.capta1.com)
Auto Dealership, Asset Manager Read This
If you are the owner of an Auto Dealership or an Asset Manager handling foreclosure properties you are well aware of the current situation already well established in the residential market and rapidly affecting the commercial market. Property owners are vastly overpaying their property taxes without a proper understanding of how CAPTA can help with immediate property tax reduction.
It is urgent that you contact us immediately to investigate this opportunity. In many cases the deadline for 2009 has already passed but we may still have a short time left if you act now. At the very least we can work on the 2010 taxes proactively.
We will work with Asset Managers with portfolios to limit tax liability. In many cases financial companies and institutions who foreclose or otherwise receive a property in lieu of foreclosure inherit back taxes as well. In some cases we can achieve reductions in these prior year taxes. Please contact us immediately.
Comments or questions are welcome.
