Downtown towers’ values soar
Written by Susan Danseyar on March 18, 2015
Come early June when 2015 taxable values are completed, Miami-Dade Property Appraiser Pedro Garcia expects that people will be impressed with how well the commercial market is doing in the downtown and Brickell area.
“Everything is looking great and, with all the construction going on, the value of properties is increasing in the Downtown Development Authority district,” he said this week. “We’re working on the pricing now but already see tremendous numbers coming in.”
Data from previous years indicate, for the most part, the taxable values on key Brickell and downtown office towers rising. Substantial increases in taxable value included Brickell World Plaza, located at 600 Brickell Ave., assessed at $112.75 million in 2014 compared with $102.5 million in 2013 and $90.1 million in 2012; and 1450 Brickell Ave., assessed in 2014 at $143,822,811 compared with $130,748,010 in 2013 and $120,120,000 in 2012.
But there was no increase in taxable value year over year for the Wells Fargo Center at 333 SE 2nd Ave. It was assessed at $123.5 million, the same as in 2013. In 2012, the building was assessed at $120.1 million.
A downtown property, One Biscayne Tower at 2 S Biscayne Blvd., actually declined in taxable value. It was assessed at $124.1 million in 2014 compared with $125.2 million in 2013. The assessed value for 2012 was $118.5 million.
For key downtown properties, Museum Tower at 150 W Flagler St. was assessed at $33.4 million in 2014 compared with $32.9 million in 2013 and $32 million in 2012.
Southeast Financial Center, at 200 S Biscayne Blvd., was assessed in 2014 at $247.6 million compared with $242.5 million in 2013 and $246.4 million in 2012.
A number of variables go into assessing the taxable value of an office building, Mr. Garcia said. They include vacancy rates, depreciation on a building and income after deducting expenses.
“There can be differences in large income-producing properties from year to year,” he said. “If rents go down or there are more vacancies, the assessment is lower.”
Every building is different, Mr. Garcia said. More than 80 people in his department work on assessments, looking at income and expenses in order to establish values.
Looking forward, he said there will be 10,000 new condos, many in mixed-use projects, at the end of 2016, which will bring more people to the downtown and Brickell area and, thus, more workers in the office towers.
For the entire Downtown Development Authority district, comprised of 1.7 square miles, taxable value of commercial property rose 7.63% from 2013 ($12,477,077,438) to 2014 ($13,428,725,854). The total millage rate for 2013 was 23.1295 compared with 23.1566 for 2014.
That’s a relatively small increase, as was the case for the rest of the county’s municipalities, according to Tom Dixon, former appraiser and founder of Dixon Commercial Real Estate. If one owns a $1 million property today in the Downtown Development Authority, he said, taxes will be $23,156 compared with $23,129 in 2013, an increase of $27.
“Lower assessments equal lower taxes,” Mr. Dixon said. “It does not mean the value of a property went down.”
He noted that there are two parts to an assessment: the value of the land and the value of the building. On Brickell Avenue, Mr. Dixon said, buildings that went up in 1986 could only have 10 stories. With zoning changes, today buildings can be built up to 60 stories.
“The land value alone is worth more than some of the older buildings,” Mr. Dixon said. “People are paying a high amount for the land and then tearing the building down so they can rebuild higher.”