The Silver Lining of Increased Vacancy

Stephen Paul, a partner in the firm's tax advocacy practice, explained in the September 2012 issue of Real Estate Forum how declining commercial real estate values have a silver lining for property owners. The decline in the market creates an opportunity to reduce taxable value, increase the bottom line and begin to turn the property's value upward. He also highlighted how real estate values, much like the real estate market itself, are largely cyclical. As rents decline, property value declines, both for business valuation and tax purposes. A lower assessment also reduces the property owner's tax bill, so any reduction in a major expense will raise the owner's net income.