In this episode, we're joined by John Watling, Director at the International Property Tax Institute. We talk about the state of the office industry, related macroeconomic concerns, and relevant challenges for property assessors.

We cover:

• Introduction to Assessment Matters podcast 00:00

• John’s bio and big ideas 00:35

• • John's experience in property valuation and property tax policy

  • The state of the office property sector and related challenges faced by assessment agencies

• The state of the office industry 4:57

• • The effect of the pandemic on offices as an asset class

  • WFH dynamics and high vacancy rates — supply outstripping demand

  • Bifurcation in the market depending on building quality

  • Occupancy levels within offices — only 40-50% even for in-office

  • Lagging factors: pre-leased offices in delayed construction finishes

• Short term macroeconomic concerns 16:32

• • Outstanding loans vs lowered valuations and higher cap rates

  • Increased hesitance in bank lending

• Challenges for assessors 19:36

• • Due diligence required for financial information and sales investigations

  • Importance of local knowledge: owners, tenants, brokers, third-party reports

  • Not being swayed by distressed and/or bankruptcy sales

  • Let the actual data—not speculation—drive results

  • Relevance of office portfolios to municipal tax revenues

• How to contact John 23:28

• • Email: jwatling@ipti.org