Why Do Your Commercial Property Assessed Values Change Each Year?

The old adage that the only thing constant is change rings true for many commercial property owners — especially in relation to assessed values. It's not uncommon to see exponential increases when notices go out, even during years when a property underwent no noticeable upgrades.

Why do assessed values fluctuate from year to year? What factors influence these changes? And what can you, the property owner, do if you believe your assessment is out of range? The Lane team is here with some answers. In this blog post, our commercial real estate experts delve into the factors that impact your assessed values — and ways to ensure you're only paying what's fair.

How Do They Determine the Assessed Value of a Commercial Property?
Commercial property assessments serve as the foundation for calculating property taxes. They play a crucial role for local governments, generating revenue for public services such as schools, infrastructure and public safety. To determine the assessed value of your commercial property, appraising or taxing entities employ a complex process that takes various factors into account:

While the above factors can all play their role in determining your commercial property's assessed value, it's important to remember that county appraisal districts (CADs) are tasked with valuing each and every commercial property within their jurisdiction — each and every year.

Most of these entities turn to mass appraisal systems to speed the process along, essentially lumping all commercial properties of similar types, sizes, class and geographic locations together. While this does allow for expedient appraisals, more often than not it generates assessed values that don't accurately reflect a commercial property's physical characteristics and/or condition. For that reason, we recommend protesting your assessed value annually.

Factors Impacting Your Commercial Property Valuation
There are a number of issues that can contribute to changes in a commercial property valuation — some of which are within the property owner's control, and some which aren't. Here are a few common factors that come into play.

How to Fight Back Against High Property Taxes
If you believe your commercial property valuation to be an inaccurate, it's important to take action. At Lane, we recommend protesting your high property taxes on an annual basis to protect your bottom line. Here's a high-level look at the steps involved.

Navigating your commercial properties' assessed values is easier with the right team by your side. If you have questions about any of the above, or if you're interested in learning how Lane can help you fight to lower your property taxes, feel free to reach out at any time. We'd love to help!