The Houston Chronicle reports that the Houston office market will likely face another tough year. With the energy industry shrinking due to the low price of oil, the local office sector is feeling the pain.
Increased Vacancy Rates
The tough reality for landlords leasing out office space in Houston is that vacancy rates are up to 17% – the highest since 1992. Commercial property owners generally need an 85-90% lease rate to be profitable. Right now there is a large number of square feet available for lease (85 buildings with at least 100,000 square feet available), making it a great market for tenants.
CBRE data shows that leasing activity, in general, was down 17% in 2019 over 2018 and the demand for office space is falling in other industries as well.
The Houston Chronicle reports that commercial property owners are working on renovations, property improvements, and facelifts to try and remain competitive in the tough market.
Remember to Document Renovations & Income Changes
When your building has a change in NOI it could affect the value of your property. Keep close records of your occupancy and income for tax purposes.
If you’re undergoing a large renovation at your commercial property, be sure to document everything you do. Keep receipts and timelines for future reference.
If your property is still under renovation on January 1, the property assessment date each year, take photos of the state it is in so you can protest your valuation if it doesn’t reflect the condition of your property as of January 1st.
A changing economy is often a time when property values may flux. Keep Property Consulting Group on speed dial so we can help you fight for a fair tax valuation through the property tax appeal process. Call today. 281-880-6500