Property taxes and assessments

Property tax = assessed value × rate. The assessor's value (land + improvements) follows its own cycle and rules per jurisdiction — it is not the market value you would sell at, and the two diverge in both directions. Rates ("levies", sometimes expressed in mills) stack from county, city and districts.

Taxes are usually the largest single operating expense in CRE, so treat them actively: calendar the assessment notices, compare assessed value against your evidence (income, comparables, condition), and appeal on the merits when the case is real — reductions persist for years. After a sale, expect reassessment toward the price in many jurisdictions — underwriting yesterday's tax bill on tomorrow's basis is a classic pro-forma error.

In NNN structures taxes pass through — but tenants read reconciliations, and a sloppy tax line invites disputes. In gross structures the landlord owns increases between base years. Either way the bill deserves the same scrutiny as any six-figure invoice.