but...

[Guest]

I honestly believe it is very difficult to appraise commercial properties as they do not turnover as often. As a result appraisal companies tend to assess residential more often. Due to this issue they are more likely to assess residential higher because of familiairty and higher turnover means higher residential prices in a town like Cranbury. With commercial there is less turnover therefore the belief that there should be less inflation in prices as they are not sold as frequently. It's in accurate as a commerical owner still knows the real estate market and will sell based on the market's increase. So commercial properties tend to be undervalued relative to the market.

[LoveCranbury]

It is hard to value commercial, did you read the post on this forum from the Rutger's Study on this question? Saw it in the "2007 Property Tax Bill" thread. It has lots of good details about this.

Here's an idea to valuate commercial, let me know what you think of it. What if you use a benchmark formula.

For the same piece of land (acreage). Instead of building the warehouse, what if you built a residential community in its place (Like Cranbury Green on the same space) What would have been the combined taxes if that land was residential instead? I know this is a what if scenario, but I make these types of valuations and assessments all the time at my firm. I know its a far out idea.

Someone else had a good post about how Cali and Penn is using a split rate to equalize the valuation. I don't know enough about who sets the policy for local taxes (is it the county, the state or Cranbury) that has control of how these property values are calculated? Maybe the tax assessor can post something to help us understand this.

[Cranbury]

The last thing we want is more residential. The increase in kids and services is too tough. The wharehouses at least have minimal burden on the infasturucture compared with homes. The issue is just that their ratings are too low. For example, if they were not in Cranbury and on 8A what is the impact to their bottom line financials. I think that is why other towns have issues attracting these rateables. The solution then becomes to rate the business as having a higher land value for the access it grants. With an increase equal to the residential given the property demands. Just one example, with the cost of gas now, the property should have a higher value as the trucks don't have to go as far to make their dropoffs, wages for the drivers are lower because there are less miles, etc...All of that makes the property attractive and of a high value.

[Guest]

Yes, warehouses and farm lands are much better than residential homes.

BTW, I think LoveCranbury was describing a way of estimating property tax of a commercial property by assuming how many residential homes can be built on the property.

[LoveCranbury]