New Philadelphia Real Estate Tax Assessments Contrast Challenges Facing Commercial Properties

Philadelphia’s Tax Year 2027 property assessments have been released, and commercial property owners should review their new values promptly. The Office of Property Assessment began mailing assessment notices on June 29, 2026. The new assessments will take effect on January 1, 2027.

This year’s reassessment arrives while Philadelphia’s commercial real estate market (particularly its office market) continues to have challenges. Some leasing indicators have improved, but many office buildings remain affected by elevated vacancy, reduced demand for space, increasing operating expenses, expiring leases, conversion costs, and sales at substantial discounts to earlier valuations.

For property owners, the relevant question is not whether the office market as a whole is improving or declining. It is whether the City’s 2027 assessment accurately reflects the current value of your particular property.

Philadelphia’s Office Market Remains Under Valuation Pressure

While there are signs of improvement in the market, weakness in certain office and commercial sectors is reflected in recent transactions. In July 2026, The Philadelphia Inquirer reported that Centre Square (a 1.76-million-square-foot office complex) was under agreement to be acquired for approximately $70 million. The property previously sold for approximately $328 million in 2017 and later entered foreclosure after experiencing substantial vacancy. Although the circumstances of any individual transaction must be examined carefully, sales of this nature provide important market evidence that may not be fully reflected in every City assessment.

This transaction follows other heavily discounted Center City transactions. At the same time, the market is not moving uniformly, and market conditions continue to vary significantly among properties. Accordingly, commercial assessments should be evaluated on a property-specific basis.

Why Your 2027 Assessment Matters

Philadelphia calculates real estate tax by applying the applicable tax rate to the property’s assessed value. The current real estate tax rate for tax year 2027 is 1.3998%. An assessment that exceeds fair market value can consequently impose substantial recurring costs.

Because citywide reassessments rely on mass-appraisal techniques, they may not fully account for property-specific valuation issues. That process is necessary to some extent, but it may not capture every property-specific fact affecting the value of a complex commercial asset.

How to Evaluate a Commercial Assessment

A commercial owner reviewing a 2027 assessment should consider several categories of evidence.

1. The property’s actual income and expenses

For income-producing properties, owners should review rent rolls, occupancy, lease terms, operating expenses, capital expenditures, and other factors affecting net operating income.

2. Recent sales

Recent sales of the subject property and comparable properties may provide important evidence of market value.

3. The City’s property information

Owners should examine the characteristics used by the Office of Property Assessment, including square footage, property type, condition, age, land area, improvements, and classification. Incorrect physical or descriptive information may independently affect the assessment.

Consideration of these factors will help evaluate whether Philadelphia’s new commercial assessments accurately reflect the current market value of a particular property. If the new assessment missed the mark, then you should consider an appeal. Property owners have until October 5, 2026, to file an appeal with the Philadelphia Office of Property Assessment.

For those considering an appeal or seeking further insights into the process, please contact James C. Vandermark (vandermarkj@whiteandwilliams.com; 215.864.6857), Jonah S. Levinson (levinsonj@whiteandwilliams.com; 215.864.7194), or a member of the Tax and Estates Group.