Burnaby Industrial Properties Appear to be Over-AssessedBC Assessment uses the income approach to value owner-occupied and investment properties.
Last year, 2020 (value as at July 1st, 2019), the Burnaby capitalization rates, used by BC Assessment, were at 3 to 3.5%. They were based upon the low capitalization rates being accepted by investors which were due to the anticipation for future rental reversions. BC Assessment was using rents of $8 - $9 per sf.
In 2021, BC Assessment is using much higher rents, in the range of $11 to $12, in their valuations, while keeping the capitalization rates the same or lower. The rate should increase if market rent is being used.
Our research has uncovered several sales of properties with rents at market level ($11 - $12) that are showing the capitalization rates higher than the rates used by BC Assessment. BC Assessment should be using higher capitalization rates.
Owners should contact us so we can assess whether they should appeal.