Case Studies

Base Year Appeals

An institutional investor purchased an office asset in San Francisco in a rising market. The assessor’s office initially rejected the purchase price and increased the base year value by 17%. We were successful in demonstrating how the asset was marketed, what the buyer’s expectations were, and what factors affected the underwriting and final purchase price. The assessor’s revised base year value was the purchase price.

Client benefits: over $1,000,000 savings per year

Timeline: From filing appeal to case resolution - 7.8 months

Repositioning

A foreign pension advisor purchased a dated retail property in the San Francisco Bay Area. Taking advantage of the local tight retail market, the client embarked a new construction and renovation project to reposition the asset. We reviewed the detailed construction costs and excluded a substantial portion of the cost from reassessment.

Client benefits: only about 60% of cost was deemed value added

Timeline: from substantial project completion to enrollment - 8 months

Re-Capitalization

A regional real estate development team purchased a storied shopping center some time ago. The client deployed every tool in the box to add value: inducing tenant turn over, renovation of common common area, making seismic improvements, constructing new specialty retail pad. The efforts had been a resounding success. The fair market value increased more than two times. The asset reached a point in time where the majority institutional partner requested divestiture. We consulted with the client’s senior management and structured the exit plan for the majority equity partner.

Client benefits: no change in ownership as a result of the majority partner’s divestiture

Timeline: according to plan

Valuation of Intangible Property

A successful Asian hotel owner, investor, and manager entered the U.S. and purchased multiple hotel assets. The purchase price paid reflected the business enterprise value of the hotel business that included tangible and intangible property. We used our proprietary valuation methodology to connect the revenue generating power of a franchise and the value of the franchise.

Client benefits: we reduced the base year value of the hotel by 25.3%

Timeline: from filing appeal to base year reduction - 17 months

Early Proposition 8 Win

A U.S. investment arm of a European conglomerate started buying high-end U.S. retail properties in early 2000. E-commerce, change consumer buying behavior, and on-line retailers had softened the demand of brick stores. As a result, high-end retail rents peaked in 2017 in San Francisco. We capitalized our connection with the retail brokers and our experiences from the last cycle and appealed and won reductions for the client since 2-18.

Client benefits: 21% reduction in assessment

Timeline: from filing appeal to case resolution - 11 months

Personal Property Audit

A successful private equity firm has occupied the same office building since it was constructed in the 1990s. The client expanded and renovated its office multiple times. During the latest mandatory audit, the client received a notice that indicated a deficiency in everyone one of the four audited years. We reviewed real property leases, detailed construction costs, and architectural draws and mapped out the history of leasehold improvements of each of client’s office suits. Using standard asset addition and retirement methods acceptable to the assessor’s office, we were able to demonstrate over instead of under assessment in each of the audited years.

Client benefits: Over assessment and a refund in each audited years instead of owing taxes each year

Timeline: from filing appeal to case resolution - 17 months

Transfer Tax

A cluster of historically significant and earthquake-damaged buildings were long-term leased by a client. We reviewed the length and complicated lease document and quantified the future net present value of the lease. The same value was independently corroborated by lessor appointed MAI (member of appraisal institute).

Client benefit: timely valuation for transfer tax affidavit

Timeline: as requested by client

Tax Certificate

An experienced developer was in need to obtaining a tax certificate before completion of construction. Under California Subdivisions Map Act, the developer must pre-pay property taxes. We gathered construction cost documents and submitted the request, only to receive a tax estimate that is four times as high. We challenged the amount of tax assessment through the use of California Public Records Act.

Client benefit: paid the correct $2.4 million in taxes instead of erroneously assessed amount of $10.8 million

Timeline: between the correct and incorrect tax assessment - four weeks