New development and steady rent bumps in Houston have their price. Houston BOMA EVP Tammy Betancourt (right, with colleague Liz Sorsby) tells us valuations are increasing 50% to 70% over last year, which is pushing taxes up to 40% of OPEX. (The tax man is such a buzzkill.) Shes never seen such a steep rise, and its even more dramatic when you consider that values jumped 25% last year.
Tammy says Texas taxes are a little different than other places because were a non-disclosure state for sales prices. Instead, valuations are supposed to be processed on a fee-simple basis, more of a bricks and mortar-type valuation. However, Harris County Appraisal District is seemingly valuing buildings on future earning potential and the value of existing leases. Houston BOMA is exploring if theres a way to dispute the system. CBRE managing director/Houston BOMA immediate past prez Mark Nicholson (here with CBs Lynn Cirillo) says hot areas like the Energy Corridor--which is over 99% occupied--are hit the hardest. He expects a flurry of lawsuits this year as property owners protest their valuations. (Good news for companies that make paper and staples.)
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