Harris County appraisal District assessed Greenway Plaza at approximately 53 percent of its market value in 2013 as a basis of an informal settlement. Greenway Plaza had a least the sales price of approximately $950 million in 2013. However, according to information on the cousins properties website, the actual rental rates for approximately 19 percent below market rents.
Property tax purposes, the value is based upon the fee simple value instead of the leased fee value. Stated simply, the leased fee value considers the actual leases in place. The simple value considers the market value of current rents, market occupancy, market expenses and a market cap rate. Our analysis of the fee simple value of Greenway Plaza in 2013 was approximately $200 million higher than the actual sales price.
Harris County appraisal District agreed informally to a value of about $611 million per Greenway Plaza when the feesimple sales price should have been approximately $1,150 million, and the least the sales price was $950 million.
Off the record comments from people close to the leaders of a number tax entities indicate they are furious that Harris County appraisal District agreed to such a low value considering the 2013 sale of the property. There are substantial concerns that the 2013 assessment of Greenway Plaza will lead to substantial reductions in the pending litigation for major value properties. Conceptually, the argument is that if Greenway Plaza was valued at 53 percent of market value, why shouldnt downtown office buildings also be valued at 53 percent of market value.
This raises many questions including the equity of assessments for the measure properties relative to smaller commercial properties and houses.