Commercial properties in Dallas County are on average 21% more valuable today than they were a year ago — at least according to the central appraisal district.

Preliminary values released Monday morning show double-digit increases across all asset types, signifying a vast divide between how property owners and the DCAD perceive the state of the market. Some sectors were hit harder than others, but protests are expected to be up across the board, and a historic level of litigation is now more of a consensus than a hunch, property tax consultants told Bisnow.

“I’m not shocked by the fact that notice values were higher because the appraisal district tends to be aggressive,” Meritax Advisors partner Ryan Chismark said. “However, I’m disappointed that they’re higher because of where we actually are in the market.”

Commercial property trades were down 58% last year as interest rates rose and the bid-ask spread widened. The lack of comparable transactions means appraisers are using cap rates from more than a year ago to determine values, a practice Chismark says is an affront to many property owners and consultants.

“It’s simply not an acceptable metric,” he said.

Industrial properties are estimated to be worth more than 50% on average, with the value of some lower-tier properties doubling year-over-year, DCAD estimates show.

Chismark’s theory for the surge is that industrial values have gone largely untouched in recent years, so DCAD is taking an opportunity to “mark to market” the assets all at once.

“There’s an argument to be made that industrial values have historically lagged from an assessment perspective,” he said. “But certainly not to a 50% to 100% extent.”

DCAD did not respond to Bisnow’s request for comment.

Multifamily values are up 20%, while retail is up 10%, per DCAD estimates. Even office, where sales have stagnated amid rising vacancies and the ongoing trend of remote work, is estimated to be 5% to 10% more valuable than it was a year ago, according to DCAD.

Jon Redmond, manager of the U.S. real property tax division at Altus Group, said retail values came in lower than he expected given the sector’s impressive comeback from the depths of the pandemic. Despite the mild increase, Redmond said his clients will fight their values.

“Even in a terrible market, we are always going to protest,” he said. “But I don’t think [retail owners] will have the sticker shock that office or industrial clients will.”

Commercial values are routinely lowered through the protest and litigation process, Chismark said. More than $9B was shaved off DCAD’s preliminary assessments last year, according to O’Connor Tax Reduction Experts.

The process will be more contentious than usual, but the vast majority of owners will ultimately broker an acceptable solution with the CAD, Chismark said.

“We’ve seen this movie before,” he said. “It ends amicably, it’s just a matter of time and process.”