US: Philadelphia’s 2027 Property Assessments Put Commercial Real Estate Values in Focus

Philadelphia has released its property assessments for Tax Year 2027, with new values taking effect from 1 January 2027. The reassessment comes at a challenging time for parts of the city’s commercial real estate market, particularly the office sector, where elevated vacancy levels, changing demand for space, rising operating costs and discounted property sales continue to place pressure on valuations.

Recent transactions illustrate the scale of that pressure. In July 2026, Philadelphia’s Centre Square office complex, comprising approximately 1.76 million square feet, was reported to be under agreement for around US$70 million. The property had previously sold for approximately US$328 million in 2017 before subsequently experiencing significant vacancy and foreclosure. While individual transactions must always be considered in context, substantial changes in sale values can provide important evidence when assessing whether municipal valuations accurately reflect current market conditions.

For commercial property owners, the key issue is therefore not simply whether Philadelphia’s wider office market is improving or declining, but whether the 2027 assessment fairly reflects the circumstances of the individual property. Philadelphia currently applies a real estate tax rate of 1.3998% for Tax Year 2027, meaning an assessment above fair market value can create a significant recurring tax cost.

Owners of income-producing commercial property should review the assumptions underlying their assessment carefully. Relevant factors may include actual rental income, occupancy levels, lease terms, operating expenses, capital expenditure and net operating income, together with recent sales of the property or comparable assets. The physical and descriptive information held by Philadelphia’s Office of Property Assessment should also be checked for inaccuracies relating to matters such as square footage, condition, classification, land area and improvements.

Mass-appraisal systems are necessary for citywide reassessments, but they cannot always capture the specific circumstances affecting complex commercial assets. Where the assessed value does not appear to reflect the property’s current market position, owners should consider whether there are grounds to challenge the valuation.

The deadline for appeals against Philadelphia’s 2027 property assessments is 5 October 2026. Commercial property owners should therefore review their new assessments promptly and, where appropriate, seek local legal and valuation advice before the deadline.

By White and Williams, US, a Transatlantic Law International Affiliated Firm. 

For further information or for any assistance please contact us@transatlanticlaw.com

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