Assessing the value of a property is no easy task, especially when you are talking about the value of commercial property. Assessors of commercial property often value property based on select factors like cost of construction, income of the property and sales of comparable properties, of which there are often few.
Using this limited information, they calculate values that may or may not be in line with what property owners think. There is room for debate, which is what dozens of commercial property owners in Madison are counting on after property values in the area shot up more than 100 percent.
According to reports, an assessment of properties including hotels and luxury apartments resulted in massive jumps in property values. Some buildings were assessed at several millions of dollars more than previous assessments.
More than 75 property owners are challenging the assessments, calling them outrageous and inaccurate.
However, the assessor’s office maintains that the updated values are accurate, despite being shocking. They argue that in previous years, the properties were undervalued. That, combined with an increase in construction of luxury properties, resulted in the massive increase.
It will be interesting to see how this situation is ultimately resolved, as it will affect things like staffing, room rates, rents, amenities, sale prices and other financial details. The case could wind up in front of the Wisconsin Supreme Court.
This situation serves as a good example of why accurate assessments are so critical when it comes to commercial property. Whether you are buying or selling commercial property, you want to be confident that you are getting a fair price. Should you have questions or concerns about an assessment, it can be a good idea to consult an attorney familiar with the commercial real estate laws and practices in Wisconsin.