PRINT
EMAIL
COMMENT
BUZZ UP
DIGG
OUR PREMIUM CONTENT
The Kiplinger Agriculture Letter
The Kiplinger California Letter
Kiplinger's Biofuels Market Alert
Kiplinger's Retirement Report
SUBSCRIBER HELP
CURRENT LETTER
2009: A Rough Start
But a Better Finish
PREVIOUS ISSUES
Dusty Elias Kirk is a partner in the Pittsburgh office of Pepper Hamilton LLP. She is co-chair of the firm's Real Estate Practice Group and chair of the Sustainability and Climate Change Team. She concentrates her practice on all aspects of real estate development, with an emphasis on real estate litigation, including real estate tax assessment appeals, land use and zoning appeals, and eminent domain proceedings. 
Sharon F. DiPaolo also is a partner in the Real Estate Group in the Pittsburgh office. She concentrates her practice in real estate litigation, including lease disputes, tax assessment appeals, and eminent domain and zoning issues. Pepper Hamilton LLP is a multipractice law firm with more than 500 lawyers in seven states and the District of Columbia.
With costs soaring and business possibly slowing, wouldn't it be nice to just cut some of your annual business expenses? Property taxes often offer just such a rare opportunity, especially in an economic downturn. What commercial property owners pay in property taxes is based on property assessments, which often overlook important changes in local market conditions.
"In a down economy, factors affecting the real estate market -- such as high vacancy, low net operating income, tenant turnover, rent concessions, or an undesirable tenant mix -- may affect the real estate you own," write Dusty Elias Kirk and Sharon DiPaolo, real estate attorneys with Pepper Hamilton. "These factors would make a property undesirable to potential buyers, but can translate into real tax savings that, in turn, can be used to help a property rebound."
Kirk and DiPaolo discuss the various factors that can affect the value of different types of commercial real estate: office buildings, industrial or flex-use facilities, retail property and apartments. Manufacturing facilities, for example, may be functionally obsolete, "which affects not only the property's utility, but also its fair market value," they say. Or a new mall may be drawing off customers and even tenants from a nearby older strip mall, eroding its value.
Anyone wanting to file an appeal will need to gather evidence that their property is overvalued -- testimony from an appraiser, for instance. And don't enter into an appeal with a "what can I lose" mentality. Careless appellants can lose plenty: Kirk and DiPaolo point out that property tax authorities have the power to raise assessed values during appeals, as well as to reduce them.
E-Mail Article
Print Article
