Hartford Business Journal

4 Hartford Business Journal | January 11, 2021 | HartfordBusiness.com Deal Watch Revals to shed light on pandemic's impact on commercial property values Property Sales T he ultimate scope and scale of the COVID-19 pandemic's impact on the commercial real estate market remains to be seen, but Connecticut is about to get some clues. More than 30 municipalities across the state, including Greater Hartford communities like Newington and Southington, have just completed their fi ve-year property revaluations, a rebalancing of taxable property that effectively locks in who pays what between now and 2025. The recent appraisals, based on market conditions as of Oct. 1, 2020, are the fi rst in Connecticut to consider the pandemic's impact on key real estate valuation metrics like recent comparable sales and property income. Any signifi cant declines in value or shifts between property types should become clearer once those municipalities publish their grand lists, which are due by the end of this month. The pandemic's impact on businesses has varied widely across sectors, with hospitality and retail companies among those that have experienced the most pain. Meanwhile, pharmacies and Class A multifamily properties have in many cases held up just fi ne. "The question is how to manage all of these [pandemic-related] factors in determining property values," said Elliot B. Pollack, a commercial property attorney at Pullman & Comley. Pollack, who represents property owners in assessment appeals, said many of his clients have already received notice of higher valuations, which, barring successful appeals or mill-rate reductions, will almost certainly mean higher taxes. Challenges to local assessments, particularly from owners of large commercial properties with fi ve- or six- fi gure annual tax bills, are routine in Connecticut. For appeals that reach Superior Court, settlements between assessors and property owners that reduce initial valuations are not uncommon, Pollack said. However, it remains to be seen how receptive judges will be to property owners who argue their buildings are worth less as a result of pandemic- induced circumstances. He expects appellants to emphasize reduced rental incomes in their arguments. Arriving at a property value requires a complex, technical analysis, and unlike the real-time prices of stocks or commodities that are bought and sold frequently and in high volumes, pricing real estate can be a bit more imprecise. "Teasing out what the impact of various market forces has on the value of real estate can be a challenge even in the best of times," Pollack said. With appeals on the 2020 revaluations set to begin in the next few months, a number of other large communities are facing revaluations this October, including Hartford, West Hartford, East Hartford, Manchester, New Haven and Greenwich. With COVID-19 vaccinations now underway, market conditions later this year, which will factor into the Oct. 2021 revals, could look more favorable than they did last October. That could bolster values, but nothing is certain, Pollack said. "It's very diffi cult to guess," he said. "There are a lot of moving parts." Elliott Pollack By Matt Pilon mpilon@hartfordbusiness.com Property address City Sale price Property type Building sq. ft. Buyer Year built Sale date 291 Queen St Bristol $368,745 Offi ce 4,940 Dostie Group LLC 1960 10/1/2020 62 W Main St Plainville $210,000 Retail 2,932 Msr Group LLC 1960 10/7/2020 435 N Main St Bristol $580,000 Multi-Family 3,512 Fisch Assocs LLC 1900 10/7/2020 989 Farmington Ave Farmington $1,200,000 Retail 1,760 989 Farmington Ave LLC 1996 10/8/2020 1640 John Fitch Blvd South Windsor $5,740,000 Industrial 256,000 N/A 1970 10/8/2020 1031 New Britain Ave West Hartford $3,000,050 Retail 62,500 Storage Solution LLC 1900 10/9/2020 2751 Main St Glastonbury $925,000 Retail 3,681 1185 Faimouth Road LLC 1967 10/10/2020 40 Hart St New Britain $1,425,000 Offi ce 25,653 Wheeler Clinic Inc 1989 10/14/2020 PHOTO CONTRIBUTED | COSTAR An aerial view of the Queen Street commercial corridor in Southington, which will soon publish its Oct. 2020 grand list. Source: Costar Here's a list of commercial properties that recently sold.

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