The arrival and implementation of mass vaccine mandates signaled a glimmer of hope that we might see the end of the valuation slide relating to certain commercial real property segments impacted by the now two-year old pandemic. Unfortunately, the emergence of highly contagious variants, including Delta and Omicron, have injected new-found concerns and doused the wave of growing optimisim in these already troubled markets. A look at the prevailing historically high vacancy conditions, negative absorption rates, and declining rents for both the office and retail spaces will no doubt continue to pour cold water on the overall investor confidence in these critical segments.
In the latter part of 2021, the Northern New Jersey Market experienced a 21.8% vacancy rate in the office segment, with demand for office space off 43.5% compared to a 20-year historical average, and office rents declining by 5% since 2019. At the same time, a recent survey shows that 68% of larger company CEOs plan to downsize their office space commitments going forward.
On the retail front, while pent up consumer demand has resulted in consistent declines in vacancy rates from 2020 through 2021, more recent analysis shows that the level of leasing demand has fallen by 21% from Q4 2020 to Q4 2021. This dramatic decline in market demand signals that any gains in this segment may have only been short lived and therefore continued difficulty can be expected here as well.
Real Property Tax Relief
The financial stress ushered in by the negative effects of the pandemic are certainly palpable and serious. One way to ease the pain may very well be to pursue real property tax relief. This approach will ensure that you are only paying your fair share of taxes.
April 1, 2022
The New Jersey Real Property tax appeal filing deadline for the 2022 tax year is April 1st, so there is still time to take action.
Consulting with your real property professionals — and in particular those who have experience navigating the appropriate strategies and procedures attendant with practice before the New Jersey Tax Court — will help answer the question whether an overassessment condition applies to your property. Good property management, regardless of property segment, in fact, dictates that such an annual evaluation be conducted to determine whether the prospect for tax relief may be available to you. Through our confidential, no-cost tax appeal evaluation services, we can help determine if your commercial property warrants an appeal in 2022. If appropriate, we prosecute appeals to seek the maximum reduction available. In most cases, these retentions are handled on a contingency fee basis so there is no legal fee unless tax benefits are realized by the property owner.