NYC office landlords are anxious to see if this year’s property tax bills will finally reflect current market conditions. They’re filing annual appeals on their Tax Assessments, hoping for adjustments.

Commercial property assessments keep rising, even though market values are dropping and many offices remain empty due to more people working from home. This year, office building assessments increased by 3.5%, especially for high-end spaces, despite the overall decline in office demand.

The city’s assessments are based on 2022 data, which doesn’t fully capture the pandemic’s impact. This creates a gap between what landlords believe their properties are worth and the city’s valuations.

Many landlords appeal their assessments annually, using their latest financial data to argue for lower taxes. If the Tax Commission doesn’t reduce their assessments, landlords can negotiate with the city’s Law Department or take the matter to court. This process can take years, and landlords must pay the current assessed taxes.

Last year, about 26,000 appeals were filed, with roughly 4,500 offers made. High-value properties are prioritized, but most owners must wait longer for a decision.

Lawyers expect more cases to surpass the Tax Commission this year as landlords become more desperate. This ongoing situation is seen as a new normal, influenced by the long-term effects of COVID-19 and hybrid work models.