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Business Observer Monday, Oct. 5, 2009 12 years ago

Grubb & Ellis enters tax-appraisal fight

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For underwater commercial property owners, Grubb & Ellis|Commercial Florida's new business service could mean more money stays in the company.

For underwater commercial property owners, Grubb & Ellis|Commercial Florida's new business service could mean more money stays in the company.

Earlier this year, the real estate brokerage and property management company created the Tax Assessment Advisory Services division mainly to help its existing receivership and other distressed clients contest municipal property-value appraisals to save on property taxes. Now the division is soliciting new business from outside its existing clients, and Don Lombardi director of the division in the firm's Tampa office, is preparing for rocketing demand.

The reduction of a firm's tax burden is offered on a contingency basis, except for a $250 retainer, which is credit against a percentage of tax recovery, says Jeff Sweeney, president of Grubb & Ellis|Commercial Florida.

“There is absolutely no financial risk,” Sweeney says. “Property appraisers think they are being generous with 10 to 20% reductions in values. In reality some of these properties have declined by 30 to 40%. That represents a lot of savings for lenders and property owners.”

Calling the new practice “the pet rock” of the commercial real estate downturn, Sweeney expects the new division to have tremendous growth over the next three to five years followed by a decline in business in an improved economy. Since January, the division has worked on about 120 properties, but both executives expect business to double or triple by this time next year.

What most distinguishes the new division for most of its national competitors, Lombardi says, is its real estate brokerage pedigree.

“We understand the environment real estate is currently in rather than just being CPAs,” Lombardi says. “We're real estate professionals. We have appraisal degrees, and we understand the math as investment professionals.”
In addition, the new division will leverage the statistical and transaction history of its brokerage parent.

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