"There hasn't been a consistent reassessment process in the Fulton County tax assessor's office," Rob Metcalf, managing director of JLL's Atlanta office, tells GlobeSt.com. "Some properties haven't been revalued in the last ten years or so. There's a huge discrepancy in the last valuation that occurred."
Many of the estimated property tax increases appear somewhat normal for the city's landmark buildings such as Bank of America Plaza in Downtown Atlanta, which faces 18% higher taxes of $6.7 million this year compared to what it paid for 2007, according to JLL figures. Other trophy assets with big tax bills include Midtown's One Atlantic Center at $4.2 million, up 30%, and Downtown's 191 Peachtree at $2.5 million, up 73%.
Other properties face percentage increases in triple digits, and quadruple in one rare case. The Pinnacle office tower in Buckhead, which changed hands in recent years, faces a 208% higher tax bill of $3.7 million this year, and Two Peachtree Pointe in Midtown saw its property taxes go up 316% to $1.5 million.
One more statistical anomaly occurred at the 55 Allen Plaza building Downtown, which went from paying $96,090 in property taxes last year to at least $1.4 million this year—a hike of 1,240%, based on JLL's analysis. Metcalf attributes that to an unusual situation in which the building benefited from previous tax abatements based on its location.
Office landlords in Atlanta are reluctant to discuss the higher property tax bills because of ongoing negotiations with the Fulton County tax assessor for possible relief. However, Metcalf points out that tenants will likely get the worst of it because the increases will likely be passed through in the form of higher rents.
The property tax hikes couldn't happen at a worse time for tenants seeking new or better space at a bargain, or to renew current leases at more favorable rents, according to Metcalf. "The taxes and the economy are counterbalancing the flight to quality that traditionally happens in a downturn," he says.
Buckhead is the most expensive of Atlanta's three major office markets, averaging nearly $28 per sf, while Midtown is around $23 per sf and Downtown is just above $19 per sf, according to JLL figures.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
