NYC Property Tax Attorney Reveals Why Institutional Investors Are Surprised by the Assessment Process

Written by:

Steve Marcinuk

Date:

25 Dec 2025

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Major real estate owners entering New York City’s property tax system often encounter a dysfunctional appeals process that does not meet the standards of a global financial center. Instead of rigorous valuation reviews and structured appeals, owners face an understaffed, expedited, and unpredictable process.

When institutional investors acquire commercial property in New York City, they typically expect the property tax assessment system to operate with professional staff, thorough valuation reviews, and a transparent process for challenging assessments. David Wilkes, a partner at Cullen and Dykman with 25 years of experience in commercial property tax matters, says these expectations are quickly dashed.

“The city has minimal staff right now to review these things,” Wilkes says. “What I find is that a lot of big institutional owners are surprised by how little attention the city gives to these assessments.”

The Reality Behind Tax Hearings

In practice, New York City’s property tax hearings are brief and rarely address the specific valuation issues owners want to raise. Wilkes describes the process as “extremely limited, extremely expedited, extremely high level, in terms of ever getting into real valuation questions, real issues.”

For investors used to detailed discussions and data-driven reviews, the system’s superficial approach is a shock. “It’s a very, very cursory approach,” Wilkes says. Owners are rarely able to present the type of property-specific evidence that would be standard in other major markets.

A key concern for institutional investors is the unpredictability of the appeals process. “It’s a somewhat random system too, in terms of whether the city decides to even look at a particular appeal,” Wilkes explains. Even when owners submit well-documented challenges to inflated assessments, there is no guarantee the city will review the case thoroughly or at all.

The Institutional Investor Disconnect

This disconnect between expectation and reality creates significant challenges for institutional owners with large New York City portfolios. These investors typically have sophisticated internal teams and outside advisors who can identify overassessed properties and build strong cases for reductions. But Wilkes notes that this sophistication often has little impact in New York City.

“A lot of institutional owners are surprised that for a major city like New York, the system for addressing property taxes in any kind of a quick way is just not really there,” Wilkes says.

Because of limited staffing and an expedited process, even the best-documented appeals may not receive the attention they would in other cities. This creates financial risk for investors who assume successful appeals are likely. Properties that are clearly overassessed can remain so for years because the city lacks the resources or systems to process appeals efficiently.

Why the System Stays Broken

Wilkes argues that the system’s dysfunction has created a niche for professionals who specialize in navigating its flaws. “It’s a very broken system, frankly,” he says. “That’s why people like me basically have a lot of work in the city, because it has a lot of problems. If this system worked better, you probably wouldn’t need somebody like me.”

As a result, property owners are often forced to hire specialized counsel to have a chance at fair treatment. This adds to the already high cost of property ownership in New York City, compounding the impact of the city’s high property tax rates.

For institutional investors, managing property taxes in New York City requires more than accurate internal analysis. It requires specialized knowledge of the appeals process and a willingness to engage persistently with city agencies. Wilkes describes the system as fundamentally dysfunctional, with limited staff, rushed processes, and unpredictable results.

Implications for Portfolio Strategy

The problems with the appeals process have direct consequences for how institutional investors should approach New York City real estate. Properties that are overassessed may remain overassessed for years, not because owners lack a valid case, but because the city lacks the capacity to address the problem.

Wilkes says owners can “certainly be proactive with the city about getting your taxes reduced.” Still, he acknowledges that success depends as much on navigating the broken system as on having a strong valuation argument. Investors who do not work with specialized counsel familiar with the city’s processes risk letting overvaluation erode returns.

The city’s limited staffing and expedited review mean that assessments often lag behind actual market values, especially in segments where prices have changed rapidly. Without enough staff to handle appeals and update assessments, overvalued properties can persistently drag on investment performance. Institutional investors must account for this risk when underwriting deals and projecting returns.

For those with significant New York City exposure, Wilkes’s experience makes clear that property tax management requires a fundamentally different approach than in other markets. The system’s limitations mean that specialized expertise and ongoing engagement are necessary to secure fair treatment. This adds cost and complexity to property ownership in New York City, making it essential for investors to adjust their expectations and strategies accordingly.