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Office Buildings

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?