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Double- and Triple- Digit Assessed Value Increases in North Cook County

by Bob Tivnan, CMI, Chicago, November 2019

 

Business real estate in the northern suburbs of Cook County, Illinois is experiencing a dramatic increase in assessed value this year based on the current revaluation by the new county assessor.

 

If this pattern continues, commercial and industrial landlords in the south suburbs could face similar steep assessment hikes when this area of Cook County is revalued next year, followed by the scheduled City of Chicago triennial reassessment in 2021.

 

Evanston Values Up 125%

 

The total 2019 proposed assessed value of all commercial and industrial property in the northern suburbs rose 74.4% from 2018, according to an analysis of data from the assessor’s office.

 

The highest increase was in the City of Evanston, a Northshore community, and home to Northwestern University. An apartment construction boom in Evanston pushed overall business property values up 125.4%.

 

Rising business property assessments exceeded residential increases in all 13 north suburban townships this year. Commercial and industrial properties now represent 44% of the $24.6 billion in total assessed value in north suburban Cook County. That’s up from 34% last year.

 

Cap Rates are Key

 

Cook County Assessor Fritz Kaegi says commercial assessments have been underestimated for years due to excessively high cap rates used by the previous assessor. Assessor Kaegi contends his cap rates are more accurate. The lower the cap rate, the higher the value.

 

For example, Kaegi used a 6% cap rate to value apartments in Schaumburg township, versus the 11.5% rate that was being used in the prior 2016 triennial reassessment. Data from Real Capital Analytics shows the lower cap rate may be more in line with the (investment) market because five apartment complexes have sold over the past two years in Schaumburg at cap rates ranging from 5.4% to 6.1%.

 

Tax Hikes to be Determined

 

A higher assessment doesn’t automatically translate into a tax hike of the same percentage. Property owners will see how the new assessments will impact their taxes when the second installment of real estate bills are sent next summer.

 

Actual taxes depend on the local tax rates set by municipalities and school districts after their annual spending budgets are approved. Another factor is the state equalizer, which is set by the Illinois Department of Revenue to achieve uniform property assessment levels in the County compared with rest of the state.

 

Cook County Board of Review is in Session

 

Business taxpayers in the northern suburbs should consult with their tax and legal advisors to review their 2019 proposed assessed values from the assessor’s office. This initial action will allow businesses to take the appropriate steps to protect their appeal rights.

 

The current north suburban triennial assessment period started with the 2019, payable 2020 tax assessment year and ends with 2021 taxes, payable 2022.

 

Change in Total 2019 Assessed Commercial/Industrial Value as proposed by the new Cook County Assessor

Barrington

116.1%

Elk Grove

82.2%

Evanston

125.4%

Hanover

32.6%

Leyden

84.1%

Maine

87.9%

New Trier

96.6%

Niles

67.9%

Northfield

82.1%

Norwood Park

84.9%

Palatine

79.7%

Schaumburg

67.1%

Wheeling

74.8%

Source: Cook County Assessor