Are Office Properties Over-Valued by County Assessors?

Are Office Properties Over-Valued by County Assessors?By Eric Owens, Director at Swartz and Associates

The decrease in demand for office space since the pandemic has significantly shifted the real estate landscape. Remote work and hybrid models have led to reduced office attendance, with some cities experiencing office vacancy rates increasing by as much as 13%. This decline in demand has directly impacted valuations, with the total value of office space expected to drop by an average of 26% between 2019 and 2030.

Why Are Office Spaces Overvalued?

County Assessors often rely on historical data and standardized valuation methods that may not fully account for the dramatic shifts in office space demand post-pandemic. Many offices remain overvalued because these assessments don’t immediately reflect changes in market conditions, such as increased vacancy rates or reduced rental income potential. Additionally, the lag in updating property valuations creates discrepancies between assessed values and actual market values.

This overvaluation has significant consequences, including:

  • Higher Property Taxes: Property owners face inflated tax liabilities despite reduced property income.
  • Challenges in Leasing or Selling: Misaligned valuations deter potential tenants or buyers.
  • Distorted Government Revenues: Inflated values can create unrealistic fiscal expectations for local governments.

Case Study: Wells Fargo’s Office Property

An example of companies rightsizing their office footprints includes Wells Fargo, which sold a large office property in West Des Moines. Built in 2000, this 425,000-square-foot property located at 7001 Westown Parkway, West Des Moines, IA, was sold to WB Realty for $16,500,000 ($38/SF) in December 2023. At the time, the County valued the property at $73,239,480 ($172/SF), with a property tax liability of $2,298,800.

This overvaluation highlights the disparity:

  • Assessed Value: $73,239,480
  • Sold Value: $16,500,000
  • Overvaluation Amount: $56,739,480
    Applying an effective property tax rate of 3.142%, this overvaluation led to an excess property tax liability of $1,782,754—a striking example of the broader issue plaguing office properties.

 What Can Office Property Owners Do?

For property owners navigating overvalued office spaces, engaging a local property tax advisor can be invaluable. They can assist with:

  1. Reviewing assessments and comparing them with current market conditions.
  2. Gathering evidence, such as occupancy rates and comparable sales data.
  3. Filing an appeal with the County and negotiating a revised valuation.

The pandemic has reshaped the office space landscape, and property owners are now grappling with the fallout of outdated valuations. As market conditions evolve, it is crucial for County Assessors to modernize their valuation practices and for property owners to advocate for fair assessments. Addressing these discrepancies will ensure valuations reflect reality, benefiting property owners and local governments alike.

Swartz + Associates, Inc. (SAI) is a full service property tax firm specializing in the review, analysis and appeals of real and business personal property tax valuations. If you need help with your property taxes, give us a call!

A New Spin on Fall Harvest and What is Raffia?

A New Spin on Fall Harvest and What is Raffia?By David Swartz, Business Development at Swartz and Associates

Iowans with any connection to a farm know the value of family gathering to help finish the fall harvest. My wife and I honor this family tradition with a modern twist. We help our floral designer-owner daughter, Sarah at her Bend, OR shop during Valentines and Mother’s Day – her biggest weeks of the year.

My roles are simple – taking phone orders, occasional deliveries, and cleaning buckets. My wife preps greens for arrangements and makes Grab-n-Go arrangements.

This last Mother’s Day tested Sarah’s personal mantra to seek Tolerance for Adversity and Uncertainty. She faced staffing adversity, uncertainties on tariff effects on pricing and customer demand. Fortunately, the shop experienced a record week – confirming the value of tolerance in the face of many challenges and calmly moving forward according to careful planning.

I even learned that raffia is a floristy, fancy type of ribbon, used for those Grab-n-Go arrangements which I was charged to cut. It’s timely to note that Swartz+Associates put a big ribbon on completing all of our April 30th property tax appeal deadlines as result of a high level of new engagements. Thank you for your continued confidence in us and we will soon report on our successes!

Finally, a creatively designed flower arrangement from a local flower shop makes a loving gift for anyone, and if you ever need flowers in Bend, OR then Wild Flowers is the flower shop to call!

 A New Spin on Fall Harvest and What is Raffia?

Johnson County, KS – 2025 Property Tax Valuations

Johnson County, KS – 2025 Property Tax ValuationsBy Donald Swartz, President

If you look at the stories we typically tell, we’re trying to educate people about the work that we do… property tax valuations. We also try to share a glimpse into the lives of the team that we’ve built to support you. And sometimes it’s important to give you a deeper dive into the complexities of how property tax valuation works in various locations. In this story, I wanted to share how things work in Johnson County for 2025.

Johnson County, KS recently mailed out the 2025 decisions for those taxpayers who filed an appeal on their valuations. There are several considerations a taxpayer should be aware of in the review of the property tax valuations which are unique to Kansas and not available in other states.

Residential appeals

If a taxpayer filed an appeal and received a decision that warrants a further appeal, there are two options available.

  1. Filing an appeal to the Small Claims Division of the Board of Tax Appeals. This must be filed within 30 days of the “Mailing Date” listed on the decision letter.  Legal counsel is not necessary, and the taxpayer can represent themselves in matters before the Small Claims Division. It is helpful to have comparable sales available or a recent appraisal of the property to share with the Board if it is helpful to your case. A hearing date will be scheduled within 60 days of the date the appeal is received by the Small Claims Division.
  2. Filing a Supplemental Informal Appeal. If a taxpayer believes the result from the hearing officer at the initial level of appeal is not acceptable, the taxpayer also has this option. When choosing to file a Supplemental Informal Appeal, the taxpayer must engage a 3rd party, Independent Kansas Certified General Appraiser or a Kansas Certified Residential Real Property Appraiser to determine the value of the property as of January 1, 2025. This appraisal must be submitted to the county assessor’s office within 60 days of the “Mailing Date” listed on the decision letter. If the appraisal is submitted timely, the county has 15 days to review the appraisal. At that time, the county must either accept the appraisal submitted or indicate to the taxpayer they will be engaging a 3rd party independent appraisal. Our previous experience on this type of appeal has been very effective as there is no discussion or hearing, simply a review of the appraisal submitted.

Commercial Appeals

If the taxpayer does not believe the earlier decision on the informal appeal was correct, the taxpayer may file with the Small Claims Division of the Board of Tax Appeals (value must be under $3,000,000). A taxpayer does not need legal counsel at this level and hearings are held locally in the Johnson County area and not in Topeka.

If the property valuation is over $3,000,000, the taxpayer must file with the Regular Division of the Board of Tax Appeals. This is a more formal process, usually involving legal counsel and expert witnesses to support the appeal. Unlike the Small Claims Division (which as indicated earlier, schedules a hearing within 60 days of receipt of the appeal), hearings may be scheduled several months from the time the appeal is received. It is very possible a 2025 appeal to the Regular Division of the Board of Tax Appeals may not be heard until 2026.

Another opportunity exists for taxpayers in the State of Kansas. If no appeal was filed when the valuation notice was initially issued, the taxpayer has the right to pay the taxes under protest. This allows the property owner to go through the process as though an appeal was filed in the Spring of 2025. The taxpayer may pay the 1st half OR 2nd half taxes under protest, but does not have to do both. Additionally, if the taxpayer chooses to pay the entire amount of the tax at one time, the payment under property form must accompany the single payment.

Confusing??? You bet – please let us know if we can be of assistance for your Kansas needs. We will make sure you are aware of all options available to you in your pursuit of a correct property tax valuation.

April Flowers Bring May Celebrations

By Donald Swartz, President

Last week, Katy True and I went to Las Vegas to meet with our Indurante Team to “celebrate” our end of filing season (even though we are still finishing a significant number of Texas property tax filings due on the 15th 😊). We had made the decision to move this event from our holiday party in December to May based upon a number of employees unable to attend our annual December Top Golf get-together.

April Flowers Bring May Celebrations April Flowers Bring May Celebrations

Indurante Employees

I don’t share enough about our Indurante employees. They simply are hardworking, client serving and results oriented. Each year, we file property tax returns for approximately 30% of the private railcar fleet and over 70% of the filings for fleet managers. This is not an insignificant number as our annual railcar count is in excess of 400,000 cars.

The property tax world is a niche business, and as I say to those who choose to listen to me, railcar property tax filings are the niche of niche! September will be the seven-year anniversary of my purchase of Indurante & Associates, Inc. and I am so pleased to be able to say my managers and director have been with me throughout the journey; making sure everything is accomplished on time and with great accuracy.

April Flowers Bring May Celebrations April Flowers Bring May Celebrations

To Noelle, Mark and Kristen, thank you for your efforts. Additionally, Emma has been with the company the past seven years, working behind the scenes and proudly proclaiming her answer to my weekly question of what she is working on, “Texas, Texas, Texas.”

We added Tyler to the mix at the start of the year and her willingness to learn and become involved has been incredibly valuable and for the first time, we worked with UNLV to hire a business student to assist during the filing season. Many thanks to Dakarri for his service while getting ready to receive his accounting degree this month.

All in all, I am extremely pleased with the efforts and results by everyone.

Speaking of employees…

April Flowers Bring May CelebrationsKeith Sherman, one of our business developers located in Dallas, recently was awarded the inaugural Engagement Award from the SMU Cox School of Business.

Keith is a mentor at the School of Business Career Management and was incredibly surprised and honored to receive this prestigious award. I have been a big fan and supporter of civic involvement over the years, and Keith’s passion for mentoring young students and involvement in the community fits perfectly into the ideals we try to live by each day.

Congratulations, Keith! This is well deserved, and we are all proud of you and of your commitment to the next generation and making the community stronger.

Does Old-School Marketing Still Work? We Believe It Does!

By Katy True, Operations Manager at Swartz and Associates

Does Old-School Marketing Still Work? We Believe It Does!In today’s digital jungle, where email inboxes overflow and every screen flashes ads faster than you can say “skip,” Swartz and Associates, Inc. (SAI) stands firmly by the belief that the personal touch of old-school marketing still holds its charm—and power.

Take our favorite retro strategy, Direct Mailers.

Yes, we’re talking about actual paper. Here’s how it works: We craft a one-page letter detailing how property valuation and taxes might impact owners, while offering our expert assistance to ease the burden. We research the market, refine our target list, and assemble our direct mailers like marketing pros—writing, printing, signing by hand, stuffing envelopes, and sending them off with a personal touch that screams, “We care!”

And guess what? The ROI is worth celebrating. Some owners contact us immediately after receiving the letter (instant gratification!), while others tuck our little gem away for years (yes, years), pulling it out when property values surge and calling us like we’re their long-lost allies.

Then there’s radio advertising, another timeless tactic we love.

Currently, we’re spreading the word in Kansas City, Des Moines, and Eastern Iowa, with past forays into the Las Vegas airwaves to dip our toes into newer markets. It’s amazing how many new clients we’ve gained from this classic channel—people hear us on their commute, probably mid-coffee sip, and suddenly realize they need our expertise. And friends and family chiming in with “Hey, I heard your ad!” is an added bonus.

We occasionally mix in a dash of modern with mass email campaigns, but these are mostly reserved for keeping our existing clients in the loop—updating them on market trends, notifying them about important changes, or simply reminding them that we’re just a phone call away for all their property valuation needs.

With dozens of clients secured through these “old-school” methods, we’re here to say: the classics still work. Direct mailers and radio ads might not be the flashiest tools in the marketing toolbox, but when it comes to effectiveness, they’re solid gold. Sometimes, the tried-and-true methods are just what you need in a high-tech world. Old-school marketing—it’s vintage, it’s classy, and it works.

Swartz + Associates, Inc. (SAI) is a full service property tax firm specializing in the review, analysis and appeals of real and business personal property tax valuations. If you need help with your property taxes, give us a call!

Heads up Missouri taxpayers: 2025 is a reassessment year!

By Charles Young, Manager at Swartz and Associates

Heads up Missouri taxpayers: 2025 is a reassessment year!Every odd year, county assessors in Missouri may adjust property values – whether increased, decreased or unchanged – to align with market conditions. Fair market value is the price a willing buyer would pay a willing seller, neither being under any compulsion to buy or sell, and both having reasonable knowledge of relevant facts.

Missouri law requires assessors to use generally accepted appraisal practices.

To determine the fair market value of commercial properties, the income capitalization approach, comparable sales method, or replacement costs minus deprecation can be applied. Typically, comparable sales are used for residential properties.

Many homeowners in Jackson County, Missouri, were frustrated by the significant increases in home values during the 2023 reassessment year. Now let’s throw a lawsuit into the process! The Missouri State Tax Commission has ordered Jackson County to roll back 2023 all property assessment increases that were greater than 15 percent — roughly three out of four properties. At this point, it is unclear how this situation will be remedied as the county is still considering additional steps for the 2023 assessment year.

As for the current reassessment, according to a release from County Executive Frank White, property tax assessment increases for properties in Jackson County will be capped at 15 percent for 2025.

If you are a property owner in Jackson County, that is quite a bit to put your arms around. Swartz & Associates, Inc. is ready to guide you through these turbulent waters as we have decades of experience working with the county assessor’s office. Please contact us should you have any questions or would like to learn more about your options.

Traveling is an important part of our work at Swartz + Associates

By Gary A. Stone, ASA, Manager at Swartz and Associates

It is said, “the world is a book and those who do not travel read only one page”. Many of my fondest memories are when I traveled, especially with my family. I think this is true for many of us, which is why we share those memories with others on Facebook or Instagram. Each of the pictures is a story that we love to relive.

My travels have led me to such places as Mexico with my wife, Disneyland with my kids, and eating lunch on top of a waterfall while canoeing through the Boundary Waters of Northern Minnesota. Each one of those trips I can hold in my heart with fond memories.

Traveling is an important part of our work at Swartz + Associates

Traveling is also an important part of our work at Swartz + Associates.

Traveling enables us to learn the story of a property by touring the facility, meeting with our clients, and understanding their operations. It is that story that enables us, as valuation professionals, to provide a thorough picture of our work.

Our trips have led us to facilities like an ice cream factory in Michigan, down a coal mine in Kentucky, a large reverse osmosis water purifying plant in West Virginia, and on top of a grain elevator in Florida (yes, Florida is much more than just beaches and Disney World). These are the experiences we draw from when we conduct our analysis of our clients’ properties.

Wanderlust is defined as a strong desire to discover, travel, and explore, which perfectly captures the curiosity of what drives me. I find that traveling for work is one of the most rewarding aspects of my job. Each journey strengthens my commitment to delivering exceptional service to our clients. Exploring the world fuels both my personal and professional growth.

Traveling is an important part of our work at Swartz + Associates

The Swartz Report: Impact of Bond Issues on Residential and Commercial Properties in Missouri

By Donald Swartz, President

The Swartz Report: Impact of Bond Issues on Residential and Commercial Properties in MissouriApril 8th was a significant day on the Missouri side of the Kansas City metro area as voters were asked to approve many bond issues in multiple cities, spanning Jackson, Platte and Clay Counties. While North Kansas City and Lee’s Summit Bond initiatives had no impact on the property tax levy, other cities planned to finance the bonds with mill levy increases.

Let’s look at a few areas more closely.

Kansas City

Voters approved a general obligation bond focusing on building new schools, major repairs to several existing schools and converting a closed former high school to a middle school. The impact of this bond passing will raise property taxes approximately $230/yr on residential appraised values of $200,000. Commercial properties, which have a higher assessment ratio in the calculation of property taxes, will raise property taxes on a similarly valued $200,000 property approximately $390/yr.

Independence

Three initiatives were brought forward to taxpayers, totaling just under $200MM. While two of the three initiatives failed, voters did approve the $55MM bond for the repair and rebuilding of certain city streets. This will have an impact of an additional $64/yr for residential properties valued at $150,000 and $108/yr for similarly valued commercial property. The median listing price for a residential property in Independence currently is $215,000 and the median sales price is $210,000.

Park Hill

The General Obligation Bond has two components, Proposition O and Proposition G. Both passed, raising $128MM. These bonds are school related, increasing teacher’s salaries and making necessary improvement to the schools in the district. Passing this initiative will increase the property taxes on a $300,000 residence by $228/yr and similarly valued commercial properties $384/yr.

In all situations, it is very important to recognize your situation. Do you own commercial or residential property in the areas identified above? Do you receive the assessment notices or are they issued to your mortgage company?

Bottom line, you need to be cognizant of your current appraised county value to determine your actual impact. 2025 is a reassessment year in Missouri and valuation notices will be issued in the upcoming weeks. The formal appeal deadline to contest your property tax values is July 14th. Knowing the mill levy increases will occur later this year, now is the perfect time to review your property tax values to insure you are paying only your fair share.

Please reach out to me if we can be of assistance. 

I didn’t know what I didn’t know.

By David Swartz, Business Development at Swartz and Associates

I didn’t know what I didn’t know.This is now the beginning of year three working with Swartz+Associates (SAI) and it is still challenging for me to predict what to expect as we enter our busiest work period for property tax appeals. But let’s look back two years, to when I joined SAI and truly didn’t know what to expect in my new role.

The short story of my career change is simple – my brother Don, asked me to join his business in 2023 because he thought I could help identify new clients for SAI growth.

I always understood Don’s business model which focuses on the review and appeal of property values. He’s labored on his methods, team building, and successful results for forty years. My career had always centered on liquid assets within a heavily regulated industry, so I had a steep learning curve to better understand commercial real estate and its sales and management models.

I didn’t know what I didn’t know.With little working knowledge of how many properties would be entrusted to me for our review, I took a leap of faith that this endeavor would work as well as Don thought. A little bit of fear is a great motivator.

Our history of great results for existing name-brand, Midwest-based companies, and the many meetings graciously accepted by friends, acquaintances, and centers of influence helped me manage the fear. The results so far? The motivation and energy generated new business at 15x greater than goals I imagined!

But what to expect two years later?

Will property valuations continue to rise? – most likely.

Will our new clients ask us to review their properties again? – hopefully.

Will my hours spent at association and industry meet and greets increase my knowledge and bring more engagements to SAI? – results look promising.

We can’t know everything, and the questions above will be answered soon – I look forward to sharing how much more I learned and how we continue to help our clients.
Let me know if we can help you with your property tax appeals!

 

Don and David Swartz

Capturing the Moment: Not All Ideas Start on A Napkin

By Keith Sherman, Business Development at Swartz and Associates

Note Taking: Not All Ideas Start on A NapkinWhen you have an idea, how do you capture it in the moment? Do you jot it on a Post-it® note, napkin, whiteboard, or type on your phone? Maybe you keep a notepad on your nightstand. Or what happens when that idea happens mid-shower?

I love a good ole pencil with a legal pad or notebook, I might even doodle a bit on it as well. Many people record their thoughts on their phone. We all have different ways of capturing an idea and the key is not letting it slip away. It might just become the next big thing, make someone’s life better or find its way to the trash, physically or electronically.

Sure, there are instances that you go back to that note and wonder what on earth you were thinking. Yet more often, it inspires a meaningful idea and marks a moment in time or provides thoughts for future exploration.

Regardless of your method, it all comes down to the content created. Is it relevant? Does it make the person smile, teach a lesson, spark a thought, or ignite a debate?

Once you’ve captured that thought or idea, take a moment to refine it (so when you go back you know what you meant!), explore its potential, and determine how it can make an impact. Whether small or significant, every idea deserves a chance to evolve and make its mark despite what you wrote it on.

Write on!

Note Taking: Not All Ideas Start on A Napkin Note Taking: Not All Ideas Start on A Napkin