All Entries Tagged With: "high vacancy"
Apartments Show Higher Vacancy, Lower Rents
Apartment Values-Moody
The accompanying chart shows the state of the market relative to apartment prices in the United States. Rest assured there is also a similar chart showing Southern California in a similar trend. To quote MIT who made the chart:
The RCA Database
The commercial property index is based on the RCA database which attempts to collect, on a timely basis, price information for every commercial property transaction in the U.S. over $2,500,000 in value. This represents one of the most extensive and intensively documented national databases of commercial property prices ever developed in the U.S.
The Associates At California Property Tax have known that apartment prices were soft for some time. Still, many of our clients are doing very well with their larger complexes. In spite of their success according to their financials, and using market information as opposed to specific financial information from the subject properties, The Associates were able to find substantial reductions as shown in the chart below:
| Original | Reduced | Difference | Tax Savings | |
| Property 1 |
$37,696,450 | $28,714,000 | $8,982,450 | $93,795 |
| Property 2 |
$36,440,661 | $15,217,478 | $21,223,183 | $226,451 |
| Property 3 | $12,523,800 | $8,039,000 | $4,484,800 | $47,167 |
| Property 4 |
$13,843,766 | $9,593,991 | $4,249,775 | $44,695 |
| $100,504,677 | $61,564,469 | $38,940,208 | $412,108 |
Just to simplify the reductions, that’s $100 million worth of property, reduced $38,940,208 for an annual tax savings of $412,108! Our clients will save this amount of money each year until the market turns around! Could you use a 39% reduction in your property’s value?
An even more incredible thing is that when we spoke to the client in Property 2 above, he told us he thought the properties were worth maybe a total of $32 million from their assessed value of $36 million. When we analyzed the financial statements we felt that his property was well worth the $36 million should he place the property for sale on the market. But we took the case anyway and began negotiating with the appraiser in the assessor’s office. We approached the value for assessment purposes on the market instead of the subject, with a great deal of success. This “outside the box” thinking saves our clients far more than they expect.
Still not convinced? Why not read our frequently asked questions? or, simply call us at (909) 867-5000.
