Property tax assessments have arrived in Dallas-Fort Worth, adding to the challenges facing commercial real estate nationwide.
Dallas County business valuations up nearly 30 percent over last year, Dallas Morning News Reportciting a study by Houston tax consultant O’Connor & Associates.
Hotels saw the biggest price increases, up 53% on average, followed by apartments at 35%. Offices across the country are being repriced due to debt scarcity and other economic factors, but Dallas County office valuations also jumped 19%.
“My desk is full,” said Candace Rubin, an investment adviser and broker in Dallas who advises clients on tax assessments and protests. Most of her clients’ commercial properties have seen valuation increases of more than 20%, she said.
Rising real estate valuations could exacerbate other issues that have hampered the office market in recent months.Rising interest rates, the fallout from banking, a lingering trend toward remote work and fears of a possible recession are contributing to record-high vacancy rates, slower sales activity and lower real estate values in many U.S. cities
Office transactions in DFW plummeted last quarter, with sales of $227 million. That’s down 80% from $1.1 billion in the same period last year.
Dallas broker Mike Turner said the new assessment is out of touch with the broader market.
“The substantial increase in taxable values is a result of the strong markets we’ve experienced in the past,” Turner told the outlet. “Assessed values are as of January 1 of the tax year, so trends in the second half of 2022 should be considered when looking ahead to 2023.”
— Quinn Donoghue