COMMERCIAL PROPERTY OWNERS SEEING LARGE INCREASES IN APPRAISAL VALUES
Commercial property value notices were mailed out last week, and the Washington County Appraisal District says this year’s values may come as an unwelcome surprise.
Chief Appraiser Dyann White estimates a 30 percent increase in the average commercial value across the county. She says while all commercial property values are rising, the largest increases are in downtown Brenham, apartments and self-storage, whose total values are jumping from $20 million to $50 million.
White says a major reason for the difference between residential and commercial appraisals this year is “a real boom” in the downtown area, with sales, beautification projects and improvements to walkability all factoring in.
White says reported sale prices reflected dramatically higher values than last year’s appraisals. In addition, the State Comptroller’s property value study showed that commercial appraisals were too low.
Public sales records in downtown provided by White were properties at 101 West Alamo Street, sold in April 2021 for $780,000, and 117 West Commerce Street, sold in July 2020 for $500,000.
White believes this is “the first comprehensive reappraisal that’s been done to downtown in quite some time,” at least five years. She also says there are more sales to examine and data to look at when considering residential reappraisals.
White says to keep in mind that most local tax rates should decrease to reflect the higher values.
The deadline for commercial property owners to protest is July 25th. White says her office has received 2,500 residential and commercial protests as of Tuesday, and expects it will see 3,000 in total. Last year, there were 1,500 protests.
Appraisers are available for walk-ins to discuss appraisals with property owners Monday through Thursday from 9 a.m. to 4 p.m., and Friday by appointment only.
A news release from the Washington County Appraisal District concerning commercial appraisals can be seen below:
On June 24, 2022, Washington County Appraisal District mailed 1316 commercial property value notices. The District acknowledges that values reflected in this year’s notices may come as an unwelcome surprise to many owners of commercial property; however significant changes are necessary to appraise at current market value as required by law (Texas Property Tax Code 23.01, Texas Constitution Article 8).
Reported sale prices reflected dramatically higher values than last year’s appraisals. The State Comptroller’s Property Value study also showed that commercial appraisals were too low.
The number of ownership changes reflected in deed records show the market is healthy and there are many willing buyers and sellers.
Rapid increases in construction costs from inflation and shortages of labor and raw materials have not slowed the pace of permitting for new construction.
There exist no excessive levels of vacancy, and there exist indications of rising rental rates.
Interest rates remained extremely low on the appraisal date. Sources of investment capital are largely unconstrained were tolerant of risks.
The District performed comprehensive inspections of almost all commercial property. In particular this included downtown areas of Brenham, Burton, and Chappell Hill, retail, self-storage and boat storage, and apartments including duplexes/triplexes/fourplexes. These inspections were of building exteriors and may not reflect the condition of the interior or any structural problem if they could not be observed.
Efforts were made to accurately and consistently classify similar properties.
Commercial properties showing the largest increases in appraised value are the downtown areas ($22.2 million in 2021 to $53.4 million in 2022), apartments ($22.2 million to $50.2 million in 2022) and self-storage ($20.3 million in 2021 to $50.4 million in 2022).
The District is sympathetic to commercial property owners, especially as they have had to contend with economic volatility in recent years. We recognize that businesses do not have the same protection from increases in the level of appraisal that most homeowners have. However, the District must uniformly apply the Texas Property Tax Code as it was intended by state legislators.
The protest deadline for owners of commercial property is July 25th. Property owners are encouraged to review their appraisal notice and to bring forward any concerns if they feel that an oversight may have been made.
When submitting a protest or visiting with an appraiser, the District requests that commercial property owners bring supporting evidence. This may include rent rolls, profit and loss statements, photographs of the property and any issues affecting its value, or estimates of the cost of repair. For properties that have sold in recent years, closing statements, fee appraisals or inspection reports are requested.
The District appreciates your patience as it works through a heavy volume of protests.