September 12, 2023

NYREJ: Hidden cost information will reduce real estate taxes

With real estate taxes increasing, owners are being barraged with hidden costs that, when properly analyzed, will decrease their real estate tax obligation. Recently, landlords have been forced to handle a variety of factors that diminish their net operating income (“NOI”). Many of these items are out of their control, but others are conscious investments necessary to maintain their revenue stream. The taxing authorities may view the revenue and presume that the property has successfully navigated the current economic environment. However, a closer examination shows that “but for” the owner’s expenditure, investment, improvements, amenities, etc., revenue would have declined significantly.

Below are a number of the costs associated with a successful property that may be overlooked if not brought to the attention of the assessor. Presenting this information can dramatically reduce property taxes in the near and long term.

  • Build-out/landlord’s contribution to tenant improvements. Landlords previously had a typical range of the amount they would pay to “get a tenant in.” Now, the costs are exorbitant and being seen in asset classes where tenants previously bore the burden. This has been particularly striking in retail properties where, depending on the size of the space, landlords are paying up front costs higher than the first year’s rent! This type of build out shows the competition for dwindling tenants to fill spaces.
  • Rising cost of labor and materials. It goes hand in hand with the above described build out costs, but it’s noteworthy that not only are landlord’s doing more, but they are paying higher prices as well. Skilled labor is in demand and that results in increased costs to perform these build outs and other work. Limited supplies impacted by demand or supply chain issues create a ripple effect that costs the Landlord money, not only in the performance of work, but delaying commencement dates and the collection of rent.
  • Mortgage rates at all time highs. While it’s been well documented that rates exceeding 7% have crushed the volume of transactions in residential real estate, it’s been overlooked that commercial properties are on a more frequent refinancing schedule. Many commercial properties have begun to experience the new rate environment or are bracing for the impact on the immediate horizon.
  • Legal costs and fees from lawsuits. When margins are thinned to the degree they are in the current economy, litigation becomes more prominent. Without the cushion of healthy profit margins, landlords, tenants, contractors, etc. are watching every invoice. This increased scrutiny has led to rising legal costs. The other way to avoid such a predicament is paying high legal fees at the outset to have the proper protections in place in each lease and contractor agreement. Either way, this is a cost that is rising.
  • Broker commissions. Having a good broker to make a match with a building is more important than ever in the post-COVID market. While not a new cost, it’s a very necessary one that oftentimes is forgotten. The rent the tenant is paying still has a significant percentage going to a broker before it gets to the landlord’s NOI.
  • Utilities tend to rise with inflation. Always a necessary cost to operate a building, but with inflation rising, the majority of utility costs are increasing as well. Furthermore, many asset classes like retail and office that would have the tenant cover or contribute to these costs on a net basis are finding they must pay these items as part of gross leases. Again, the format of the lease and increasing costs are a double hit for landlords.
  • Fees. There are an abundance of real estate associated fees in Nassau and Suffolk County. Permit fees are the most common, but it’s the special uses, sign fees, etc. In fact, tax map fees became so exorbitant in Nassau County that a Judge struck down their cost. Now after having reduced their tax map fee, additional lawsuits are again in court claiming the fee is still disproportionate and is essentially another way to tax owners.
  • Free rent. Landlords may have a signed agreement at a figure of $20 per s/f, but if they give a year of free rent on a five-year lease, the true rent figure is $16. This creates an illusion in the landlord’s operations, as the impact is not seen after year one. However, it cannot be ignored that the $20 the landlord is collecting was at a significant cost that impacted cash flow for the entire year. 

The irony of all these hidden costs is that they are increasing at a time when the real estate market is as risky as ever. This underscores the importance of bringing these items to the attention of the assessor in order to have property taxes reduced so that at least one cost is headed in the appropriate downward direction. 

Brad Cronin, Esq., and Sean Cronin, Esq., are partners at Cronin & Cronin Law Firm, PLLC, Mineola, N.Y. 

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Brad W. Cronin, Esq.

Brad W. Cronin is the founding Partner at Cronin & Cronin Law Firm. He has over 40 years of Legal Experience. Brad represents a cross section of many of the largest New York developers, property owners, national corporations, REITs and retail chains. He has extensive trial experience having successfully litigated and resolved high profile cases throughout New York State which has resulted in a number of landmark decisions in the field of Tax Certiorari. 


Over the years Brad’s reputation for honesty and integrity has led to long term relationships with municipal assessment officials. His expertise and extensive experience along with his reputation has resulted in some of the highest property tax reductions in New York State.


Brad has been selected as a Who’s Who of Long Island Business News for the past 7 years in the fields of Tax Certiorari law and Real Estate Law. Each year Long Island Business News honors business leaders whose creative approach to challenges and positive results help to make Long Island better.

For over 30 years Brad has earned the highest rating awarded by Martindale Hubbell in both competency and ethics in his field. This is an honor bestowed on him by his peers for his professional excellence.


Brad is a columnist for the New York Real Estate Journal’s “Ask the Expert” quarterly feature discussing current real property tax issues. Some issues addressed are Hurricane Sandy’s effect on property taxes, Nassau County’s Disputed Assessment Fund, emerging market trends, New York’s property tax rates, and how your purchase price can affect your taxes.

Brad has been an invited speaker and participant on various panels involving different subjects affecting tax certiorari and valuation of property such as condominiums, environmental contamination, and reviewing changes in the tax certiorari field. As a member of the Nassau and Suffolk Condemnation and Tax Certiorari committees, he has worked to implement changes to facilitate the timely resolution of commercial tax protests.

Brad currently serves as executive member of the steering committee and served as Co-President of the Long Island Real Estate Group for three years. This organization has supported various Long Island charities, as well as real estate related projects, educational real estate programs and networking events. He is Cofounder of the North Shore University Hospital Department of Medicine Leadership Circle Committee and serves on the Village of Plandome Planning Board.

Sean M. Cronin, Esq.

Sean M. Cronin is a founding partner at Cronin & Cronin Law Firm with over 20 years experience. He specializes in negotiating tax certiorari matters for prominent developers, national REITs and tenants in Nassau, Suffolk, and Westchester counties, as well as the five boroughs. He is responsible for successfully reducing the assessments, and thereby the real estate taxes, on many of the largest properties in New York State thanks to his expertise in property valuation issues and knowledge of market conditions and demographics. His clients include developers and owners of all property types, including office buildings, industrial buildings, shopping centers and retail locations, restaurants, apartment buildings and condominium complexes, golf courses and assisted living facilities. 


Sean is an Executive Board member and past Co-President of the Long Island Real Estate Group, a charitable organization created to support local communities.   He is an Executive Board Member of Vision Long Island which advances more livable, economically sustainable, and environmentally responsible growth on Long Island through Smart Growth.   Sean is an Advisory Board Member of the Viscardi Center and on the Board of Advisors of the Energeia Partnership. He is an active member of the Chaminade Lawyer’s Association and Real Estate Group as well as the Washington & Lee Alumni Association. 


Sean is featured regularly in the New York Real Estate Journal’s “Ask the Expert” section and has been quoted in various publications, including the Long Island Business News and Newsday. He has been recognized by the Long Island Business News as a “Who’s Who in Commercial Real Estate” multiple times, most recently in 2023 and by the Long Island Herald as the Top Tax Certiorari Attorney in 2023. 

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Our staff is knowledgeable in all areas related to property tax. We regularly consult with clients regarding purchasing a property or possible major construction by projecting future property taxes and values as well as aid in obtaining any exemptions they may be eligible for.
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