UPDATED: 10 A.M., AUG. 30:
The pandemic and remote work have impacted commercial real estate in San Francisco. Now eight landlords with properties assessed at more than $100 million want their property tax bills cut in half.
Some of the city’s largest landlords have filed appeals to the city’s Assessment Appeals Board seeking a 50 percent reduction in last year’s taxable assessment, the San Francisco Business Times reported. The appeals were set to be heard on Monday, Aug. 29, but the meeting was canceled.
If granted, the nine reassessed properties could severely impact city finances, especially if other property owners make similar requests.
The appeals rest on the economic impact of the value of each property.
A property owner could point to tenants unable to pay their rent, reducing the profitability of the building, San Francisco’s Chief Economist Ted Egan said. Or they could make the case that declining demand for office or retail space harmed the value of their properties. Remote work has caused many companies to downsize.
San Francisco property owners are required to pay their assessed tax for a given year, even if their appeal of their property’s value is pending. Commercial landlords often appeal the assessed value of their properties during economic downturns, said an Assessment Appeals Board spokesperson.
Last fall, Dropbox, the Golden State Warriors and Wells Fargo were among those looking to lower San Francisco property tax bills as the city struggled to rebound from the pandemic.
The nine properties under appeal are among the most visible in the city. Each owner wants the 2021 assessed value reduced by half.
Tishman Speyer, based in New York, has appealed the assessed value of $536 million for its 435,000-square-foot office tower at 222 2nd Street in SoMa. Notable tenants include LinkedIn, according to the Business Times.
Blatteis & Schnur, based in Los Angeles, has appealed the assessed value of $313 million for its 250,000-square-foot mixed-use building at 100 and 120 Stockton Street in Union Square. One tenant has been signed for the 200,000-square-foot retail segment.
Hines, based in Houston, has appealed the assessed value of $291 million for its 403-unit apartment tower at 33 and 41 Tehama Street in SoMa. The appeal is for tax year 2021 – before catastrophic flooding this summer made the building uninhabitable.
Other properties under appeal include: The Piers, an office and retail complex at historic Piers 1 1/2, 3 and 5 in the Embarcadero, owned by Invesco Real Estate; a 150,000-square-foot shopping center at 444 9th Street in SoMa, owned by Arcadia Realty Trust; the 179-unit Argenta Apartments at 1 Polk Street in Civic Center, owned by Greystar; and One Union Square at 200 and 212 Stockton Street in Union Square, owned by Ashkenazy Acquisition.
An appeal by The Swig Company for its 270,000-square-foot office building at 633 Folsom Street in SoMa may be withdrawn, according to its owner.
— Dana Bartholomew
Correction: A previous version of this story didn’t mention that the meeting on Aug. 29 was canceled. Also, the address for The Swig Company property is now accurate.
Read more
Residential
San Francisco
Report: Santa Clara County property values jumped a record $43B in 2021
Commercial
San Francisco
Dropbox, Golden State Warriors appealing SF property assessments