All Entries Tagged With: "commercial property"
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.
Commercial Property Values Decline
Down 49%
If you own real property in the state of California then you know commercial property values are falling. Further, you know your California property tax value has not. This was a headline in late September relating to the commercial property market:
Moody’s: US commercial real estate prices resume steep declines in July
New York, September 21, 2009 — Commercial real estate prices as measured by Moody’s/REAL Commercial Property Price Indices (CPPI) renewed its steep declines and low transaction volume in July, Moody’s Investors Service reports. The CPPI was down 5.1% from June after having declined by only 1% the prior month. It is now 30.8% below what it was a year earlier and 38.7% below the peak measured in October of 2007.
We suspect that you are well aware of these factors and, in fact are here because of them. No one knows the direction of the market for the future but one thing we know for sure: property tax values in California for commercial real property is high while values are dropping. Take a look at some of the recent reductions we have achieved on different kinds of real property in the commercial California property tax market:
| Original Value |
New Value |
Difference |
||
| Prop #1 | $37,696,450 | $28,714,000 | $8,982,450 | $93,795 |
| Prop #2 |
$36,440,661 | $15,217,478 | $21,223,183 | $226,451 |
| Prop #3 |
$12,523,800 | $8,039,000 | $4,484,800 | $47,167 |
| Prop #4 |
$13,843,766 | $9,593,991 | $4,249,775 | $44,695 |
| $100,504,677 | $61,564,469 | $38,940,208 | $412,108 |
That is $412,108 in annual property tax savings for our Clients in the 2009 tax year. That’s $412,108 that the California state government will not get. And that is $412,108 that will go to the bottom-line for our commercial property Clients. It should be noted that several of these Clients told us when we took these properties last year that there was nothing there relative to a decrease in the assessed value. But we know that the assessed value that we work with and the fair market value that our clients know are two different things.
In California, in the commercial real property market the times are tough. We believe they are going to get tougher. Never in our experience has there been a greater need to reduce the expenses in the bottom line of every company in California. California Property Tax Associates can definitely help. But only if you act.
Act now and call us at (888) 678-9TAX.
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.
