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January 25, 2012 Published in City Hall, Top Stories

Alexandria Real Property Values Rise

By Carla Branch
alexandrianews.org

Alexandria’s real property tax base is up 3.53% or $1.15 billion from Jan. 1, 2011, to Jan. 1, 2012. Residential property increased in value by 1.55% or $284.98 million from $18.43 billion in 2011, to $18.72 billion in 2012. Alexandria’s commercial troperty tax base increased by 6.60% or $882.11 million from $13.36 billion in 2011, to $14.24 billion in 2012. State assessed public service corporation property assessments decreased by 1.93% or $16.34 million from $844.75 million in 2011, to $828.41 million in 2012. Residential real property comprises 55.4% of the City’s total real property taxable base while commercial and Public Service Corporation property represents 44.6% of the base.

“This is the earliest that we have ever presented this report to Council and that is due to the hard work of everyone in the Department of Real Estate Assessments,” said Thaddeus Jankowski JR, the director of DREA. “We mailed property assessments to property owners last Friday. Normally, this information is presented at the same time as the proposed operating budget.”

New construction activity added $160.71 million for Callendar Year 2012. Residential new construction accounted for $94.30 million, while the commercial sector, which includes multifamily rental accounted for $66.41 million. In CY2011, $126.04 million in new residential and commercial growth was added to the City’s tax base. Overall, $286.75 million in new construction has been added to the tax base over the last two years. This equates to approximately 0.84% of the current total taxable real property base.

The average assessed value for a residential single-family home as of Jan. 1, 2012, increased 1.91% from $621,095 in CY2011, to $632,958 in 2012. The average assessed value for a residential condominium as of Jan. 1, 2012, decreased 0.7%, from $268,936 in 2011, to $266,919 in 2012.

The number of properties valued under $250,000 grew from 11,135 in 2011, to 11,309 in 2012., reflecting a 1.56% increase. The number of properties assessed for $500,000 and greater, increased from 13,667 in 2011, to 14,384 in 2012, an increase of 5.25%. For CY2012, 64.41% of all residential properties are valued for less than $500,000.

“Rosemont and Del Ray are the neighborhoods where property values increased the most,” Jankowski said.

The number of foreclosures in the City totaled 179 during 2011, a decrease of 42% over the previous year’s total of 308. Nearly three-quarters of the City’s 2011 foreclosures were of condominium properties.

“Most of the commercial growth came from multifamily dwellings,” Jankowski said. “This will likely be the case for some time.”

The multifamily rental apartment market’s recovery was very strong and was evidenced by increasing rents, capitalization rate compression and a number of valid arms-length transitions that occurred in the City, which confirmed the trend. The overall annual increase of assessed values for this property class in 2012 was 16.83% from the previous year.

The commercial office market recovery can best be described as uneven with values posting only modest gains. While capitalization rates decreased, overall vacancy rates generally increased resulting in lower net operating incomes. This phenomenon was to some extent reported across all classes of office with property owners offering concessions such as periods of free or reduced rent and substantial build-out allowances in order to attract or retain tenants. The overall increase in the assessed values for office buildings in the City was 2.42% from the previous year.

The recovery of the hotel/motel industry in the City was also uneven at best. For the most part, newer, well located hotels were either stable, or improved their operating position during 2011. Older properties, in secondary locations continued to struggle. Several older facilities in the West End continued to experience declines in average daily room rate and occupancy. The 2012 overall increase in the assessed value for this property class was 4.58% from 2011.

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