DFW Industrial Property Owners Saw Tax Bills Go Up 23% Over Last 5 Years
The value of industrial properties is going up in the Dallas-Fort Worth region, and contrary to the national norm, property taxes are soaring as well.
Higher property values should mean lower tax rates because it takes less effort to generate the same number of tax dollars. But that is not the case in DFW.
That isn't dissuading investment, but the Altus Group's report does note jurisdictions have been slow to reduce tax rates. Altus recommends investors and owners implement proactive budgeting and benchmark industrial property values with an eye toward challenging appraisals.
"Fair and equitable treatment is a defense widely used to ensure a just valuation," according to the Altus Group report. "Benchmarking a property against similar assets allows for outliers to be spotted more easily."
Everything is up in DFW industrial recently, including assessed valuations. DFW Airport industrial sector average assessed values have gone from $39.66 to $44.69/SF, with taxes per square foot rising from $1 to $1.13/SF, Altus found. Average assessments in the North Fort Worth industrial submarket have gone from $29.44 to $33.08 per square foot, with taxes rising from $0.88 to $0.98 per square foot
South Dallas and North Fort Worth have seen record growth in the industrial sector in recent years. Nearly one-quarter (22%) of the 100,000 jobs added to the region last year can be attributed to the industrial sector, according to Altus.
The area around DFW Airport is the region's strongest submarket, but Altus tracks fairly healthy upward trends in all regional submarkets.
"They've all had a steady increase," Altus Group Property Tax Director Mark Wood said of DFW submarket activity. "We've had a good five to seven years of saying, 'We're going to be taking an increase in value this year.'"
Wood said the increase in appraised values has been a steady constant rise, one that he doesn't see slowing down in the immediate future. The increase in e-commerce, especially, is expected to continue the drive for more flex space.
CORRECTION, MAY 31, 9:21 A.M. CT: An earlier version of this story used the word "rents" instead of "valuations." Altus tracked the property's assessed values and taxes and did not report on rental changes.