Atlanta Real Estate - Atlanta Office Values

Today we are looking at the trend in office values in the Atlanta metro area. Based on information from LoopNet sale price per square foot has been on an uptrend for approximately six months. The median sale price at the start of this year was approximately $70/SF.

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Atlanta Real Estate - Atlanta Commercial Real Estate

The Georgia tax assessors are sending out 2013 tax assessment notices and it is time to take a look at Atlanta commercial real estate values. Below is the sale price per square foot trend for retail real estate in metro Atlanta. It appears we are still bouncing along the bottom:

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Cobb County Tax Assessor - Apartment Appeals

The Cobb County apartment market has been on fire in recent years due to the high number of foreclosures and families losing their homes. Despite attractive interest rates, home buyers remain on the sidelines due to stringent mortgage underwriting. It has really been the perfect storm for apartment communities. Now that the great recession is supposedly behind us and the Georgia tax assessors are able to increase values, you can expect apartments to be in the crosshairs of the Cobb County tax assessor.

In the fourth quarter of 2012 Real Estate Research Corporation shows that apartment properties in the Atlanta Metro area have an average going-in capitalization rate of 6.4%. This is the lowest capitalization rate that they reported for any commercial property class in the Atlanta area. This cap rate is for first tier investment properties, which are defined as new or newer quality construction in prime to good locations.

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Cobb County Tax Assessor - Flex Warehouse Appeals

The Cobb County tax assessor is gearing up to send out 2013 assessment notices to all property owners in Cobb County, Georgia. Last year the Cobb County tax assessment notices came out two weeks after the Gwinnett County notices and we'll see if that happens again. Gwinnett County was sending out their 2013 notices on Friday, April 5. Last year we filed our Cobb County property tax appeals very early during the 45 day appeal period and our board of equalization hearings were scheduled very early in the process. You can realize tax savings quickly if you do the same.

There's a good chance that the Cobb County tax assessor will be looking at flex/warehouse properties for the 2013 revaluation adjustments. According to Real Estate Research Corporation (RERC), institutional investors see the industrial sector as a good investment and they suggest that as the economy improves the industrial sector has the most potential upside. However, the flex sector was not seen as desirable as the industrial warehouse sector. According to CBRE, industrial vacancy declined to 12.8% during the fourth quarter of 2012, and over the past two years the industrial market has shown a steady decline and availability.

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Gwinnett County Tax Assessor Notices Were Out First in 2012

The Gwinnett County tax assessor was first out of the gate in 2012 when their notices were released on April 6, 2012. It remains to be seen whether they will be the first out again in 2013, but my guess is yes! (Update, they were!) It is officially tax time here in the great state of Georgia and everyone in Gwinnett County should be on the lookout for a 2013 property tax assessment notice. I know that last year people in the Gwinnett County tax assessors commercial section were saying that they thought their full service hotel values were too low, so I think you may see those rise.

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Keep Your Office Tenants Happy with a Fair Assessment

If you're like many office building owners you pass through many of your expenses to your office tenants. Many of you probably prorate the property tax and send it on to each of your tenants. Although property tax changes based on the millage rate and the assessed value of the property, property taxes are considered a fixed expense. However, if you can get this fixed expense reduced you may be at a competitive advantage compared to your office building competition.

Of the major commercial property types in the Atlanta area office buildings have the highest vacancy rates at over 20%, according to Realty rates.com. This means there are tens of millions of square feet of office space available throughout the Atlanta metropolitan area. Office tenants that are flexible on where they are located have an opportunity to save money by changing their location.

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Fulton spent roughly double that of Cobb and Gwinnett administering each parcel

This is the full quote from Jan Jones, R-Milton, is House Speaker Pro Tem:

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Tax Assessors Make the Best Property Tax Consultants

After working with a lot of different people in the property tax consulting business I’ve come to the conclusion that the best people to do this type of work are those that are former tax assessor employees. Having a solid understanding of the mass appraisal process that the tax assessors use is a great advantage when you are working with tax assessment personnel and trying to negotiate a lower value. Being able to relate to the County assessment staff, understanding what their job is, understanding the parameters that they need to work within, and what you can and cannot do if you want to keep their trust is vital.

 I can’t say that I’ve worked for every board of tax assessors in the world but I have worked for two different counties both Fulton County, Georgia, and Prince William County, Virginia, so you could say I know the property tax assessments, and appeals process inside and out. Having been the commercial appraiser manager for Fulton County, Georgia Board of Tax Assessors provides insight into the regular day-to-day operations there.  When I walk into county tax assessment departments and can talk to the county appraiser and let them know that I used to do exactly what they do, that develops instant rapport.

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Property Tax Appeal

I have been appealing property tax assessments for ten years now. One thing I am sure of about a property tax appeal is you never know what you are going to get. Market value is in the eye of the beholder, and every beholder has an opinion. 

An appraisal is an opinion of value. Hire two licensed appraisers to value your real estate and they will both inspect your property inside and out. They will scour the market for the most recent, comparable sales. They will agonize over the reconciliation of the data to select the most likely price you property will bring in the open market. You will most likely get two different value opinions. 

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Non Operating Expenses and Property Tax Appeals

When appealing your property tax assessment for an income producing property there are some expense items that you should not include in your income approach to value. The Appraisal Institute defines operating expenses as the periodic expenditures necessary to maintain the real property and continue the production of the effective gross income. Operating expenses can be fixed expenses that do not vary with occupancy, or variable, which generally vary with the level of occupancy or the extent of services provided. They include management charges, leasing commissions, utilities, heat and air conditioning, general payroll, cleaning, maintenance and repair of structure, decorating, grounds and parking area maintenance, security, supplies, rubbish removal and exterminating.  

There are non-operating expenses that you might be tempted to use in your income approach but the tax assessor will throw them out, or tell the board of equalization that you are including non-operating expenses. Some of these non-operating expenses are expenses that the IRS allows on your tax return, which causes some confusion.

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property tax appeals

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