Single Story, Multi-Story, and Medical Office Buildings
Offices are typically assessed using the Income Approach. Many factors can influence your office value. Is the office building multi-tenanted? Can it be subdivided? Medical buildings can include examination rooms, x-ray facilities, etc. Many times personal property that is assessed to a doctor can also be part of the real estate assessment. This is not legal and should be looked at carefully.
Factors to consider in getting your office building assessment reduced
- Has your occupancy dropped at the end of the year?
- Do you have different rent amounts for different floors?
- Is a new product on the market that might be hurting your occupancy and rental rate?
- Are you considering Leasehold Value versus Fee Simple value? In most states Fee Simple Value is the law.
- Is there deferred maintenance or roof repairs needed?
- Is a major tenant’s lease term expiring?
- Have you provided concessions and finish out allowances?
- Is there a large amount of common space leading to higher expenses than typical? (i.e. an Atrium)
- Is there a high proportion of short term leases that lead to more risk? This can lead to a higher vacancy allowance and a higher capitalization rate.
- Do you have full service or triple net leases?
- Who are your tenants? Doctors leasing to themselves often pays higher than market rents.
- Is there limited parking availability?