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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.
OPEN LETTER TO A PROSPECTIVE CLIENT
Mark,
Allow me to introduce myself. My name is Jim Guffey and I’m one of the partners in California Property Tax Associates. I’m also Tom’s brother.
In 1989-90 I started a property tax reduction company in San Bernardino County, California. You may or may not recall that property values were doing very well and foreign investors, particularly the Japanese were buying up commercial property at record levels. Properties frequently appreciated during the escrow period 5 or even 6%. You could almost do no wrong. Business was good and Tom and I worked together for over 10 years reducing property values for our clients. Tom has told me that you want letters of reference but I hope this e-mail will suffice.
In the early 90s one of our first clients was a gentleman based in San Diego County who was buying small pieces of property in San Bernardino County from individual landowners. The size of the parcels was two to five acres. When he bought enough small pieces he began the entitlement process and subsequently sold the properties to a large company who would build the homes. He was very successful but the assessors office saw what he was doing and immediately began assessing his property when he first purchased the vacant lot for what a year and a half later he would sell the parcelized property for, per acre. In other words, if he bought the raw land acre for $4000 and sold it a year and a half later, entitled for $40,000 an acre the assessor was immediately assessing all of his raw land purchases for $40,000 an acre. We were successful in appeal in getting all of these transactions reduced to his original purchase price arguing stage of development. This was hundreds of individual parcels.
Another client was Premier Homes, a French company based in Corona. They were in a similar position to your company with large holdings of land in Southern California. We worked on many of their properties but in particular, one parcel in Lancaster had a value of $16 million and was fully entitled, ready to build. We were successful in reducing this property to less than $4 million. It subsequently sold a short time after we achieved the reduction for $8 million.
It is important to understand that fair market value in the marketplace is not the same as fair market value for assessment purposes. Frequently we are successful in reducing property that sells for far greater than what our reduction showed. Again, this is because when we value property in accordance with the Revenue and Taxation Code in the state of California we follow the guidelines set forth in the appraisal manuals and also the guidelines used in each particular county. Unfortunately these differ substantially from county to county. However, frequently these appraisal guidelines work in our favor and our clients, many of whom told us there was no possible way for us to get reductions on a given property, are amazed at our results. Not always but frequently.
Another client was located in the Beaumont area in Riverside County and had purchased a property known as the Three Ring Ranch. It was situated at the split of the 60 and the 10 freeway’s and was purchased by an individual who planned on flipping it to a housing company. But while he was negotiating the market turned and nobody was interested. We began our work for him in 1990 and subsequently he lost the property in foreclosure. We continued our work for the new owner securing large reductions in the back taxes. This property did subsequently sell and was developed in later years and is still known as Three Ring Ranch.
In the same area Highland Springs Resort had just transferred ownership in the late 80s. In addition to the resort which had many varied buildings and improvements, along with a mobile home park there were numerous residential development parcels. Although this property took a considerable amount of time and numerous appeal hearings due to its complexity, we were also successful in reducing it’s assessed value substantially.
We did substantial residential development properties in the high desert area of Victorville as well. Schaffer Real Estate and Investment Company, Inc. had substantial vacant land holdings and we succeeded in reducing scores in his portfolio. Additionally, Thomas Rhubik had a number of large residential development properties that we had great success with.
These are the companies that come to mind. We also worked extensively in the Central Valley as well as the Bay Area. In short, we have experience with all the major counties in California and a number of the smaller counties as well. While the rules are all the same as each county has to live by the Revenue And Taxation Code they each have latitude to accomplish certain tasks their own way. When you hire us you hire someone who has the ability and experience to accomplish the task at hand in the shortest possible time with the greatest possible results.
I hope this helps. The decision you have before you is complex and infinitely important to the bottom line of your company and its investors. The inventory that currently exists on your balance sheet is an expense. The quicker you can reduce the related expenses the easier it will be to wait out this market. But make no mistake: if you don’t file, you don’t see reductions. And if you do file but lack the experience and understanding of the system you will likely lose as well. In the least you will not accomplish the maximum possible result. We will.
One last thing. Over the years our client list has included many attorneys who knew better than to try to understand the workings of the assessors office when they had no experience. One of our early clients was actor Tony Curtis. We never met him, we only worked through his attorney. With great success. His attorney knew better than to venture into this territory.
In case Tom didn’t tell you, I am currently in Guatemala but will be happy to fly out to meet you once we have a relationship. If you’re not comfortable paying us a percentage we do work on an hourly basis. However, as you know our percentage fee is based solely on results. But the sooner we get started the better for you.
Sincerely,
Jim Guffey
About
CAPTA (California Property Tax Associates) is a California Partnership that specializes in real estate property tax consulting throughout the State of California. One of our partners began performing these services for California Property owners in 1989. Throughout the 1990's the focus was primarily on large commercial projects and land developments as well as upscale residential properties. We saved thousands and thousands of Californians many millions of dollars in over-assessed property taxes. Our results then, like now were based on employing a highly skilled staff, access to extensive industry information, and a clear understanding of the property tax assessment process.
Unlike other companies our fee is entirely contingency based; no savings, no fee. There is never an up-front fee or a reimbursement of costs. Simply put, NO SAVINGS; NO FEE.
OPEN LETTER TO A PROSPECTIVE CLIENT (NOW A CLIENT)
Dear Mark,
Allow me to introduce myself. My name is Jim Guffey and I'm one of the partners in California Property Tax Associates. I'm also Tom's brother. In 1989-90 I started a property tax reduction company in San Bernardino County, California. You may or may not recall that property values were doing very well and foreign investors, particularly the Japanese were buying up commercial property at record levels. Properties frequently appreciated during the escrow period 5 or even 6%. You could almost do no wrong. Business was good and Tom and I worked together for over 10 years reducing property values for our clients. Tom has told me that you want letters of reference but I hope this e-mail will suffice.
In the early 90s one of our first clients was a gentleman based in San Diego County who was buying small pieces of property in San Bernardino County from individual landowners. The size of the parcels was two to five acres. When he bought enough small pieces he began the entitlement process and subsequently sold the properties to a large company who would build the homes. He was very successful but the assessors office saw what he was doing and immediately began assessing his property when he first purchased the vacant lot for what a year and a half later he would sell the parcelized property for, per acre. In other words, if he bought the raw land acre for $4000 and sold it a year and a half later, entitled for $40,000 an acre the assessor was immediately assessing all of his raw land purchases for $40,000 an acre. We were successful in appeal in getting all of these transactions reduced to his original purchase price arguing stage of development. This was hundreds of individual parcels.
Another client was Premier Homes, a French company based in Corona. They were in a similar position to your company with large holdings of land in Southern California. We worked on many of their properties but in particular, one parcel in Lancaster had a value of $16 million and was fully entitled, ready to build. We were successful in reducing this property to less than $4 million. It subsequently sold a short time after we achieved the reduction for $8 million.
It is important to understand that fair market value in the marketplace is not the same as fair market value for assessment purposes. Frequently we are successful in reducing property that sells for far greater than what our reduction showed. Again, this is because when we value property in accordance with the Revenue and Taxation Code in the State of California we follow the guidelines set forth in the appraisal manuals and also the guidelines used in each particular county. Unfortunately these differ substantially from county to county. However, frequently these appraisal guidelines work in our favor and our clients, many of whom told us there was no possible way for us to get reductions on a given property, are amazed at our results. Not always but frequently.
Another client was located in the Beaumont area in Riverside County and had purchased a property known as the Three Ring Ranch. It was situated at the split of the 60 and the 10 freeway's and was purchased by an individual who planned on flipping it to a housing company. But while he was negotiating the market turned and nobody was interested. We began our work for him in 1990 and subsequently he lost the property in foreclosure. We continued our work for the new owner securing large reductions in the back taxes. This property did subsequently sell and was developed in later years and is still known as Three Ring Ranch.
In the same area Highland Springs Resort had just transferred ownership in the late 80s. In addition to the resort which had many varied buildings and improvements, along with a mobile home park there were numerous residential development parcels. Although this property took a considerable amount of time and numerous appeal hearings due to its complexity, we were also successful in reducing it's assessed value substantially.
We did substantial residential development properties in the high desert area of Victorville as well. Schaffer Real Estate and Investment Company, Inc. had substantial vacant land holdings and we succeeded in reducing scores in his portfolio. Additionally, Thomas Rhubik had a number of large residential development properties that we had great success with. These are the companies that come to mind.
We also worked extensively in the Central Valley as well as the Bay Area. In short, we have experience with all the major counties in California and a number of the smaller counties as well. While the rules are all the same as each county has to live by the Revenue And Taxation Code they each have latitude to accomplish certain tasks their own way. When you hire us you hire someone who has the ability and experience to accomplish the task at hand in the shortest possible time with the greatest possible results.
I hope this helps. The decision you have before you is complex and infinitely important to the bottom line of your company and it's investors. The inventory that currently exists on your balance sheet has associated expenses. The quicker you can reduce those related expenses the easier it will be to wait out and even thrive in this market. Property Taxes are one of the largest expenses. But make no mistake: if you don't file, you won't realize maximum reductions. And if you do file but lack the experience and understanding of the system you will likely lose as well. In the least you will not accomplish the maximum possible result. CAPTA will.
One last thing. Over the years our client list has included many attorneys who knew better than to try to understand the workings of the assessors office when they had no experience. One of our early clients was actor Tony Curtis. We never met him, we only worked through his attorney, with great success. His attorney knew better than to venture into this territory.
In case Tom didn't tell you, I am currently in Guatemala but will be happy to fly out to meet you once we have a relationship. If you're not comfortable paying us a percentage we do work on an hourly basis. However, as you know our percentage fee is based solely on results. But the sooner we get started the better for you.
Sincerely, Jim Guffey
Comments or questions are welcome.
