The Opportunity Arises to Challenge Inflated Tax Valuations

Nothing is harder than returning to the office after a relaxing Labor Day weekend. Unfortunately for the owners of office buildings nationwide, it appears clear that nearly 3 years after the pandemic began, many office workers are still not returning to the office at all. Consequently, companies are continuing to shed office space and the office market outlook has become less favorable.  On Long Island, CBRE reports three consecutive quarters of negative absorption has resulted in sublease supply reaching a new record high. In addition, leasing activity in Q2 was 40% below the 5-year quarterly average and has now reached the lowest level on record. (CBRE | Long Island Office Figures Q2 2023) Most industry watchers expect the office market to fall even further in the coming months and many think that it may take years for the office market to stabilize.

As the market comes down, however, the opportunity arises to challenge inflated tax valuations and try to reduce property tax bills into the future. This is especially true for investors and end-users who may have paid a premium for office buildings over the past five years as the market soared, and now find themselves in a cash crunch as the market recedes and mortgage payments become more onerous due to rising interest rates. All of these factors come together to create a prime opportunity to consult your local property tax attorney to gain a little buoyancy to help weather the office market storm.

Thank you to Will Meyer for this week’s Tax Tracker.