North Texas avoided many of the home value excesses that now plague California, Arizona and Florida but commercial developments in Texas were not so fortunate.  Now the bill is coming due.

Dallas Morning News reports that at the end of February the missed payment rate for Dallas buildings with securitized mortgages was more than 9% compared to 6.72% nationwide according to Trepp LLC, a New York based analyst that tracks nationwide properties  that are so financed. .  That’s almost triple the rate a year earlier.  Even without the $175 million loan to the Four Seasons Resort and Club in Las Colineas, which has been posted for foreclosure, the Dallas missed payment rate would be 7.9%.

The Dallas troubled properties number 160 with $1.28 billion of debt.

In addition to Las Colinas the list includes downtown Dallas’ Harwood Center office tower and the Village on the Parkway shopping center in Addison.

Hotels lead the category list in Dallas at 17% with late payments; office buildings are second with 12%.

What does it mean for taxable valuations on commercial properties?

In 2010 for the first time the Property Tax Code acknowledges foreclosures and neighborhood decline as relevant to value.. “In determining value . . . the chief appraiser may not exclude from consideration the value of other . . . property in the same neighborhood because… the market value has declined because of the declining economy, or… it was sold at foreclosure…”

Though the clause refers to residential properties our past experience with Appraisal Review Boards indicates that a similar argument, buttressed with a strong statistical foundation, will influence the board members’ decisions.  Property Tax Protest is building a portfolio to support protests for our commercial clients in 2010.  We anticipate a productive season.

For the Dallas Morning News’ March 4, 2010 article, paste this link into your browser:

http://www.dallasnews.com/sharedcontent/dws/bus/industries/commrealestate/stories/030410dnbusLate.1710f3b3a.html