Why Retail Property Owners Should Appeal New Property Assessments

Many retail properties have faced significant hardships over the last several years, causing lower property values and smaller investor returns. However, in many areas, real estate assessments are not fully phasing in the current economic realities faced by property owners. As a result, retail property owners should scrutinize new assessments and consider filing appeals.

Economic Downturn is Affecting Operations

Most, if not all, retailers are still suffering from supply chain constraints. Consumers are continuing to experience drastic increases in the cost of goods and services. The Consumer Price Index (CPI), which measures the average change over time in the price of certain consumer goods and services, for January 2023 was up 6.4% from the prior year. As a result of constrained consumer budgets, retailers of consumer discretionary goods are seeing less traffic. Compounding this issue is the fact that inflation is causing higher operating costs for all property owners.

Brick and Mortar is Phasing Out

The demand for retail properties continues to be impacted as consumers favor e-commerce over traditional brick-and-mortar storefronts. Lower demand and rising interest rates are impacting upgrades for existing properties and new construction starts. Properties with anchors who sell essential goods (grocery and drug stores) are doing okay but are down from their historic peaks.

Assessors are Relying on Historical Practices That are No Longer Relevant

With so many factors influencing retail property valuations, many of which have not been fully phased in by assessors, now is the time to diligently evaluate appeal options. With the help of real estate tax experts, you can be sure that every opportunity to reduce your property’s assessment will be fully vetted and executed.

‍Contact Bo Vicendese for a complete assessment.