Commercial property: income is the argument
Commercial assessments turn on income, and the evidence is your own operating statements.
Commercial property is assessed on a different basis from residential, argued on different evidence, and worth substantially more per appeal. It is also the one category where professional help is usually worth its fee.
The three approaches
Income. What the property earns. Net operating income divided by a capitalisation rate. This is the dominant approach for income-producing property and the one most commercial appeals turn on.
Sales comparison. What similar properties sold for. Weaker for commercial because genuinely comparable sales are rare.
Cost. What it would cost to rebuild, less depreciation, plus land. Used for special-purpose buildings with no market and no income.
The income approach, in outline
NOI is gross potential rent, less vacancy and collection loss, less operating expenses — but not less debt service, depreciation or income tax.
A property with NOI of $180,000 at a 8.5% cap rate supports a value of about $2.12 million.
Every term in that equation is contestable, which is where commercial appeals are actually fought.
Where the argument happens
Vacancy and collection loss. Assessors often apply a market vacancy rate. If your actual vacancy is higher and has been sustained, that is a real argument — supported by rent rolls, not assertion.
Operating expenses. Whether the expense ratio used reflects the building's actual costs.
The capitalisation rate. A small change here moves the value a great deal. A rate of 8.5% against 7.5% on the same NOI changes the supported value by over $280,000 in the example above.
Market rent against contract rent. Assessment generally uses market rent for the space, not what a particular tenant happens to pay. A below-market lease does not automatically reduce the assessment, and an above-market one does not automatically raise it.
Cook County classification
Commercial and industrial property is class 5, assessed at 25% against residential's 10%. That is why classification errors on mixed-use buildings are worth so much — a residential portion incorrectly coded commercial is being assessed at two and a half times the right level.
Vacancy relief
Worth knowing about specifically. In the Cook decision record, "the result of the total vacancy of your property" appears on 5,262 decisions with a reduction in every one, and partial occupancy on 13,878 with the same outcome. Vacancy is recognised, it is granted when established, and it is a separate claim from any argument about the income approach.
Why professional help is usually worth it here
For residential appeals, the county's own record shows no consistent advantage to representation. Commercial is different: the argument is technical, the evidence is your own financial records rather than public data, and the amounts at stake commonly run to tens of thousands a year.
The evidence is also work — rent rolls, operating statements, market rent surveys, cap rate support — and assembling it to a standard that survives scrutiny is a professional exercise rather than an evening's research.