January 2014 Sequoia Market Update
Contents of this Newsletter
Time to File Your Realty Tax Complaints - Rick Ferris
Recent Deals by Sequoia Realty Corp.
- 9002 Mentor Ave., Mentor - 8,600 Sq.Ft. Medical/Office Building - SOLD for $591,000
New on the Market at Sequoia Realty Corp.
- 30525 Euclid Ave., Willowick - Restaurant/Bar Investment - For Sale @ $289,000
REDUCED PRICE! Properties at Sequoia Realty Corp.
- 1202 High St., Fairport Harbor - 16,200 Sq. Ft. Mini Storage - $740,000!!!
Real Estate Tax Valuation Challenges March 31, 2014 Deadline - Kevin and Dan Hinkel of Kadish, Hinkel and Weibel.
January 2014 Sequoia Market Update
Time to File Your Realty Tax ComplaintsDear Friends,
With the polar vortex upon us, my wish is for you to stay warm and healthy!
This is the time of year for real estate tax valuation complaints. And by complaints, I don't mean just expressing your dismay verbally. If your tax valuation is too high, you need to file an official complaint with the county and work for a reduction.
Personally, I can say that we have had great success these past few years in challenging the inflated valuations imposed by the county taxing authorities, bringing the values more in line with true market values.
We have found it best to work with a law firm that takes these cases on contingency, so there is no cost to us other than a percentage of the savings when it is realized. Included in this market update is a brief article on the process prepared by the attorneys that we use, Kevin and Dan Hinkel of Kadish, Hinkel and Weibel.
Don't delay, because you only have until March 31 to file the complaint. As always, just let me know if I can be of any help!
Happy New Year!
Rick
This is the time of year for real estate tax valuation complaints. And by complaints, I don't mean just expressing your dismay verbally. If your tax valuation is too high, you need to file an official complaint with the county and work for a reduction.
Personally, I can say that we have had great success these past few years in challenging the inflated valuations imposed by the county taxing authorities, bringing the values more in line with true market values.
We have found it best to work with a law firm that takes these cases on contingency, so there is no cost to us other than a percentage of the savings when it is realized. Included in this market update is a brief article on the process prepared by the attorneys that we use, Kevin and Dan Hinkel of Kadish, Hinkel and Weibel.
Don't delay, because you only have until March 31 to file the complaint. As always, just let me know if I can be of any help!
Happy New Year!
Rick
PS. If you know anyone who is looking to buy, sell or lease real estate, just let me know. I will be happy to help.
Richard Ferris, CCIM, MBA
President
440.946.8600 x103
Rick@SequoiaRealty.com
Recent Deals by Sequoia
Property Address - Sq. Ft. - Leased/Sold
9002 Mentor Ave.
Mentor, OH
8,600 Sq.Ft. Medical/Office Building
Mentor, OH
8,600 Sq.Ft. Medical/Office Building
- SOLD for $591,000
5782 Heisley Rd.
Mentor, OH
16,840 Sq. Ft. Industrial Warehouse
Mentor, OH
16,840 Sq. Ft. Industrial Warehouse
- SOLD for $849,900
7345 Center St.
Mentor, OH
2,700 Sq. Ft. Retail Building
Mentor, OH
2,700 Sq. Ft. Retail Building
- SOLD for $190,000
29017 Chardon Rd.
Willoughby Hills, OH
Willoughby Hills, OH
2,000 Sq.Ft. Office Space
- FULLY LEASED
- FULLY LEASED
854 E. 185th St.
Cleveland, OH
5,025 Sq.Ft. Retail Building w/ Full Basement
- PENDING SALE
Cleveland, OH
5,025 Sq.Ft. Retail Building w/ Full Basement
- PENDING SALE
New on Market/ Price Reduction
Property Address - Sq. Ft. - Type - Lease or Sale Price
Property Address - Sq. Ft. - Type - Lease or Sale Price
NEW ON THE MARKET!
30525 Euclid Ave., Willowick
3,840 Sq.Ft. Restaurant/Bar Investment
For Sale @ $289,000
3,840 Sq.Ft. Restaurant/Bar Investment
For Sale @ $289,000
NEW ON THE MARKET!
1899 Hubbard Rd., Madison
4,284 Sq. Ft. Office/Medical Building
For Sale @ $195,000
For Sale @ $195,000
1202 High St., Fairport Harbor
3 Building Mini Storage Facility w/ 132 Units
16,200 Total Sq.Ft.
Investment Property for Sale @ $790,000
3 Building Mini Storage Facility w/ 132 Units
16,200 Total Sq.Ft.
Investment Property for Sale @ $790,000
PRICE REDUCED to $740,000!!!
3720 Warrensville Center Rd., Shaker Heights
14 Unit Apartment Complex
Investment Property for Sale @ $695,000
14 Unit Apartment Complex
Investment Property for Sale @ $695,000
PRICE REDUCED to $665,000!!!
Real Estate Tax Valuation Challenges
March 31, 2014 Deadline - Kevin and Dan Hinkel of Kadish, Hinkel and Weibel.
Property owners have until March 31, 2014 to file a complaint with the County Board of Revision (“BOR”) for the specific county in which a property is located to challenge the valuation of the property for real estate tax purposes for calendar year 2013. A filing for 2013 will also govern 2014 in Cuyahoga County as well as in Lake County as 2013 is the second year of the triennium in each of those two counties. Our firm is very familiar with the challenge process as we have represented property owners, as well as the Orange Board of Education and the Berea Board of Education, for three decades on these matters. Complaints filed regarding those school districts will be, like my walk from the parking garage to the office this morning, uphill and into a cold, brisk wind.
The correct preparation of the complaint is critical. Although the courts have overruled in recent years a number of the previously fatal jurisdictional defects, the completion of the complaint still contains many traps for the unwary. Clearly, it is best to have an attorney who is skilled in this area complete the complaint. Whether a property is overvalued, fairly valued or undervalued, is best determined by considering its income earning potential (in the absence of a recent sale). The best indication of value of a property is a recent sale, say within the past two years of the valuation date at issue. In most instances, that sale will be controlling as to the valuation. Absent such a sale, with regard to income producing property, the valuation is determined by the capitalization of the net operating income (“NOI”) as well as through comparison of the subject property to the sales of comparable properties within the marketplace.
Regarding the capitalization of NOI, costs and expenses of capital, interest, amortization, depreciation and real estate taxes are excluded from the determination. The NOI is capitalized at a capitalization rate which is typically determined either from capitalization rates in market place transactions or the mortgage/equity rate plus the addition of the specific tax additur for the property’s location. Tax additurs within northeastern Ohio fluctuate from just over 2% to just over 4%. Typically, capitalization rates range from 9.5% to 12.5% primarily dependent on the tax district and the quality of the investment opportunity that the property presents.
With regard to the identification of comparable sales, experienced law firms in this area, such as our firm, have access to databases which provide information regarding asking rents, actual rents, and specific sales information as to property sales, whether the properties are retail, commercial or industrial. The databases contain very detailed information that is critical to analyze the comparability of the sold property to the subject property. Owner occupied property is more difficult to analyze due to the absence of a rental stream at the property and as a result the databases’ information becomes even more valuable. If the property is 100,000 ft.² or less, there are often sales of investment property which can be utilized as comparable sales. However, if the subject property is greater than 100,000 ft.², the ability to secure comparable sales is very difficult. The comparable sales then need to be adjusted based upon the specifics of the subject property as compared to the comparable sales. Generally, the items to consider for adjustment are location, land size, size of building, physical condition, age of structure, and difference in conditions of the market from the tax lien date to the date of the sale. An appraiser is best-suited to make these adjustments, but often times the property owner or counsel can make limited arguments at the BOR regarding the comparable sales. Additionally, in smaller counties, the BOR may have familiarity with the actual sales.
The BOE for the applicable jurisdiction has the opportunity to file a counter-complaint and to participate in any hearings at which the reduction sought is equal to or greater than $50,000.00. The BOE can also independently file complaints to increase the valuation of properties within its district. Prior to the 2008 decline in market values, many BOE’s filed independent increased complaints on a regular basis. Complaints filed for 2013 will likely be set for hearing before the BOR before the end of November, 2014, sooner in Lake County. Prior to the hearing, the evidence upon which the complainant basis his claim of reduction is presented. The evidence must be presented to the BOR in the BOE in advance of the hearing. At the hearing, the property owner's testimony or that of an appraiser is very important and the absence of either is a serious detriment in the process. The witnesses need to be prepared to answer questions regarding the property and how it competes with its marketplace.
If the complainant is not satisfied with the result at the BOR, the owner can appeal to either the Court of Common Pleas (“CCP”) or to the Ohio Board of Tax Appeals (“BTA”). The BOE can only appeal to the BTA. Virtually all appeals are filed with the BTA given the hearing examiner's experience and the infamiliarity of the CCP with these types of cases and the presence upon its docket of criminal cases and complex civil litigation. Like the Cuyahoga County BOR, the BTA has greatly increased the speed in which it disposes of appeals in the past few years now. Typically, the BTA sets the hearing to be held on an appeal for six months after of the date of receipt of the appeal. Both the BOR and the BTA have very restrictive policies as to continuances and those should not be expected.
Historically, the engagement of appraisers has typically been delayed until the appeal is pending from the BOR decision. However, an earlier engagement of the appraiser so that he/she can testify before the BOR as well as the BTA should be considered. Additionally, given the very significant shortening of the time the appeal is pending before the BTA from a few years to only six months has caused the demand for appraisals to skyrocket. As a result, where a substantial reduction is sought, the engagement of the appraiser early in the process is advisable.
Should you have any questions with regard to your property, please contact Kevin Hinkel or Daniel Hinkel of Kadish, Hinkel and Weibel at and 216-696-3030
March 31, 2014 Deadline - Kevin and Dan Hinkel of Kadish, Hinkel and Weibel.
Property owners have until March 31, 2014 to file a complaint with the County Board of Revision (“BOR”) for the specific county in which a property is located to challenge the valuation of the property for real estate tax purposes for calendar year 2013. A filing for 2013 will also govern 2014 in Cuyahoga County as well as in Lake County as 2013 is the second year of the triennium in each of those two counties. Our firm is very familiar with the challenge process as we have represented property owners, as well as the Orange Board of Education and the Berea Board of Education, for three decades on these matters. Complaints filed regarding those school districts will be, like my walk from the parking garage to the office this morning, uphill and into a cold, brisk wind.
The correct preparation of the complaint is critical. Although the courts have overruled in recent years a number of the previously fatal jurisdictional defects, the completion of the complaint still contains many traps for the unwary. Clearly, it is best to have an attorney who is skilled in this area complete the complaint. Whether a property is overvalued, fairly valued or undervalued, is best determined by considering its income earning potential (in the absence of a recent sale). The best indication of value of a property is a recent sale, say within the past two years of the valuation date at issue. In most instances, that sale will be controlling as to the valuation. Absent such a sale, with regard to income producing property, the valuation is determined by the capitalization of the net operating income (“NOI”) as well as through comparison of the subject property to the sales of comparable properties within the marketplace.
Regarding the capitalization of NOI, costs and expenses of capital, interest, amortization, depreciation and real estate taxes are excluded from the determination. The NOI is capitalized at a capitalization rate which is typically determined either from capitalization rates in market place transactions or the mortgage/equity rate plus the addition of the specific tax additur for the property’s location. Tax additurs within northeastern Ohio fluctuate from just over 2% to just over 4%. Typically, capitalization rates range from 9.5% to 12.5% primarily dependent on the tax district and the quality of the investment opportunity that the property presents.
With regard to the identification of comparable sales, experienced law firms in this area, such as our firm, have access to databases which provide information regarding asking rents, actual rents, and specific sales information as to property sales, whether the properties are retail, commercial or industrial. The databases contain very detailed information that is critical to analyze the comparability of the sold property to the subject property. Owner occupied property is more difficult to analyze due to the absence of a rental stream at the property and as a result the databases’ information becomes even more valuable. If the property is 100,000 ft.² or less, there are often sales of investment property which can be utilized as comparable sales. However, if the subject property is greater than 100,000 ft.², the ability to secure comparable sales is very difficult. The comparable sales then need to be adjusted based upon the specifics of the subject property as compared to the comparable sales. Generally, the items to consider for adjustment are location, land size, size of building, physical condition, age of structure, and difference in conditions of the market from the tax lien date to the date of the sale. An appraiser is best-suited to make these adjustments, but often times the property owner or counsel can make limited arguments at the BOR regarding the comparable sales. Additionally, in smaller counties, the BOR may have familiarity with the actual sales.
The BOE for the applicable jurisdiction has the opportunity to file a counter-complaint and to participate in any hearings at which the reduction sought is equal to or greater than $50,000.00. The BOE can also independently file complaints to increase the valuation of properties within its district. Prior to the 2008 decline in market values, many BOE’s filed independent increased complaints on a regular basis. Complaints filed for 2013 will likely be set for hearing before the BOR before the end of November, 2014, sooner in Lake County. Prior to the hearing, the evidence upon which the complainant basis his claim of reduction is presented. The evidence must be presented to the BOR in the BOE in advance of the hearing. At the hearing, the property owner's testimony or that of an appraiser is very important and the absence of either is a serious detriment in the process. The witnesses need to be prepared to answer questions regarding the property and how it competes with its marketplace.
If the complainant is not satisfied with the result at the BOR, the owner can appeal to either the Court of Common Pleas (“CCP”) or to the Ohio Board of Tax Appeals (“BTA”). The BOE can only appeal to the BTA. Virtually all appeals are filed with the BTA given the hearing examiner's experience and the infamiliarity of the CCP with these types of cases and the presence upon its docket of criminal cases and complex civil litigation. Like the Cuyahoga County BOR, the BTA has greatly increased the speed in which it disposes of appeals in the past few years now. Typically, the BTA sets the hearing to be held on an appeal for six months after of the date of receipt of the appeal. Both the BOR and the BTA have very restrictive policies as to continuances and those should not be expected.
Historically, the engagement of appraisers has typically been delayed until the appeal is pending from the BOR decision. However, an earlier engagement of the appraiser so that he/she can testify before the BOR as well as the BTA should be considered. Additionally, given the very significant shortening of the time the appeal is pending before the BTA from a few years to only six months has caused the demand for appraisals to skyrocket. As a result, where a substantial reduction is sought, the engagement of the appraiser early in the process is advisable.
Should you have any questions with regard to your property, please contact Kevin Hinkel or Daniel Hinkel of Kadish, Hinkel and Weibel at and 216-696-3030
