In many areas across the country, such as Pennsylvania and Ohio, it has become a common, albeit controversial, practice for taxing jurisdictions to file "reverse tax appeals" against commercial property owners. These jurisdictions track property sales, specific asset types (e.g. apartments), and other information in order to gauge potential opportunities to seek higher commercial property valuations and boost their real estate tax revenues.
A state-appointed city overseer has settled Atlantic City's remaining casino property tax appeals from 2014-2017. The settlement includes Caesars Atlantic City, Bally’s Atlantic City, Harrah’s Resort, Golden Nugget Atlantic City, as well as several of billionaire Carl Icahn's properties (the closed Trump Taj Mahal Casino Resort and Trump Plaza Hotel and Casino, as well as Tropicana Atlantic City). While the state did not reveal the exact amount of the settlement, officials said an $80 million bond introduced by City Council last month will be used to fund the repayments.
Fueled by the rapid growth of e-commerce, the U.S. industrial market is benefiting from tight supply and rising rents and is expected to enjoy sustained momentum throughout 2017. To track the most in-demand markets, real estate services firm CBRE put together a list of cities and regions with the lowest prime yields on logistics assets. The average prime yield for the U.S. is currently 5.84 percent.
In an effort to keep up with e-commerce distribution demands, developers in New Jersey and Long Island are repurposing vacant suburban office buildings into warehouses. While this conversion seems backwards, as office space costs more to build and usually generates higher rents, the red-hot warehouse market driven by the rise of e-commerce has changed that. Though the numbers are small, several suburban office properties in or near New Jersey and Long Island industrial neighborhoods have been redeveloped as warehouses. Industrial values continue to rise, making the conversion worthwhile for developers.
As several large corporations executed major relocations to upgrade their space and take advantage of state incentives, Northern and Central New Jersey enjoyed one of their best quarters for office leasing in recent history. New Jersey absorbed 1.8 million square feet of office space in Q3 of 2016, the highest amount of square footage absorbed in any one quarter in the state in the past fifteen years, according to Cushman and Wakefield. Nearly all of the occupancy gains were concentrated within the Class A product. The last two quarters combined have produced slightly more than 2.8 million square feet of net occupancy gains, as vacancy has fallen by 140 basis points since the first quarter.
Following investigations opened in November by state officials, three New Jersey municipalities will be ordered to conduct property revaluations, after not doing so for a least a quarter century. Officials indicated the investigations were just the "beginning of a larger effort to address issues of noncompliance," and named six other municipalities that could also face state orders. All but four of the 32 municipalities that haven't reassessed or held revaluations in 25 or more years are in Hudson, Union or Middlesex counties, according to state records.
Once again, New Jersey and Illinois ranked as the two worst states in the country when it comes to property taxes, according to a new survey from personal finance website WalletHub. In order to identify the states with the highest and lowest property taxes, WalletHub’s analysts compared the 50 states and the District of Columbia using U.S. Census Bureau data to determine real-estate property tax rates. While property taxes vary from county to county across the state, WalletHub divided the “median real-estate tax payment” by the “median home price” in each state to determine the property tax rate.
CentraState Healthcare System, located in Freehold Township, is a private, not-for-profit health organization with 285 in-patient beds and 2,600 employees, making it one of western Monmouth County's biggest employers. Five of CentraState’s properties, ranging from the hospital to assisted-living facilities, are exempt from paying property taxes due to its nonprofit status. However, after a state Tax Court judge earlier this year ruled that Morristown Medical Center had so intermingled its nonprofit and for-profit services and finances that it could no longer qualify for a tax exemption under state law, many nonprofit New Jersey hospitals are concerned they will see similar fates. In this case, CentraState currently pays $1.7 million a year in property taxes, or about 43 percent of its maximum assessment, but could be on the hook for $2 million more.
Morristown and the Atlantic Health System, owners of the Morristown Medical Center, finally reached a settlement, ending the closely-watched property tax battle dating back to 2006. The likelihood of a settlement increased significantly in June when Tax Court Judge Vito Bianco denied Morristown Medical Center's challenge to overturn the Morristown tax assessor's denial of tax-exempt status for portions of its operations, and ruled that the hospital would be responsible for paying taxes. The judge found that the medical center had so intermingled its nonprofit and for-profit services and finances that it could no longer qualify for a tax exemption under state law.
New Jersey Governor Chris Christie on Monday conditionally vetoed two controversial bills aimed at stabilizing Atlantic City’s chaotic finances. In an effort to end property appeal battles, which officials say “significantly strain city finances,” the first bill would have let casinos stop making property tax payments based on real estate values, and instead make fixed payments in lieu of taxes (PILOT) for the next 15 years. The second bill would have diverted gambling money to the city, which the city was counting on to help close a $101 million deficit this year. Christie suggested alterations to both pieces of legislation and sent them back to lawmakers for their approval.