It has been roughly six years since COVID arrived and rewrote the rules of commercial real estate. The headline narratives of 2020 — empty downtowns, mall apocalypse, warehouse boom — have long since hardened into structural facts. What hasn't fully caught up is the assessor's roll. Walk into any 2026 commercial assessment review and you will still find owners paying tax on a pre-pandemic market that no longer exists. This post is the retrospective we wish every commercial owner had on their desk before signing off on their 2026 tax bill.
Office: The Hardest Hit, and It Stayed Hit
Office is the headline story and it deserves the attention. Hybrid work normalized somewhere between 2022 and 2024, and the equilibrium that landed is not "everyone back at the desk." Most large employers in our markets settled on three days in-office, which translates to a structural reduction of roughly 30-40% in required square footage per employee once lease cycles complete. Sustained CBD vacancy in Detroit, Cleveland, and Columbus has sat in the 15-25% range for the better part of three years, and sublease space — the leading indicator of true demand — flooded the market starting in 2021 and never fully cleared. The Federal Reserve's ongoing financial stability reports have flagged CRE office as a primary concern through this entire window for exactly that reason.
The conversion-to-multifamily story is real but partial. A handful of cities — most visibly Cleveland and to a lesser degree Detroit — have moved meaningful blocks of obsolete Class B office into apartments through tax credits and adaptive reuse programs. The math only works on a narrow band of buildings (right floor plate, right window depth, the right basis after distressed acquisition). For most Class A and Class B office owners still holding, the appeal angle in 2026 is straightforward: the actual rent roll, the actual occupancy, and the actual cap rate the market is using for that asset class. Our office property tax appeal practice is built around that documentation.
Retail: A Bifurcated Recovery
The retail story splits cleanly along two axes: format and location. Neighborhood and grocery-anchored centers proved astonishingly resilient. They were the venues people could still use in 2020, and they kept that habit. Many of these centers now trade at values above 2019 because cap rates compressed against newly-validated tenant credit. Enclosed regional malls went the other way: e-commerce, which had been chewing 100-200 basis points of share per year, gained an estimated three to five years of compressed adoption in 2020 alone. The weakest 20% of U.S. malls are functionally dark or close to it, and even survivor malls trade at materially lower cap-rate-implied values.
Big-box and pharmacy compounded the retail trend with a wave of corporate closures: Bed Bath & Beyond, Rite Aid, Walgreens footprint reductions, and ongoing CVS rationalization. Each closure produces a vacant box that re-prices to its highest and best alternative use — which, post-COVID, is almost never another big-box retailer. Dark store theory became more powerful as comp evidence because the closure wave produced actual, recent, arm's-length sales of vacant big-box buildings at deep discounts to their occupied assessment. For owners of any retail property or shopping center, the 2026 question is whether your assessor sourced comps from the resilient grocery-anchored pool or the depressed big-box and mall pool — because they are valuing two completely different markets.
Hospitality: Leisure Won, Business Travel Hasn't
Hospitality split into a haves-and-have-nots story. Extended-stay and leisure-driven markets — Florida, mountain resorts, drive-to destinations — recovered fully by 2022 and now exceed pre-COVID RevPAR. Full-service urban hotels dependent on convention bookings and corporate travel have not. Conventions came back, but with smaller attendee counts and fewer multi-day room blocks. Corporate travel returned partially but never to 2019 budgets; Zoom-substitution is sticky for the marginal trip. For CBD full-service properties in Detroit, Cleveland, Indianapolis, and Columbus, 2026 RevPAR remains 10-20% below 2019 in real terms, and the cap-rate expansion for that asset class makes the value gap larger than the income gap suggests. We see this every cycle in our hospitality property tax appeals.
Industrial: The Boom That Then Reset
Industrial was the one COVID winner — for a while. Distribution and last-mile warehouse demand surged in 2020-2022 as e-commerce exploded, sending rents and values to record highs. Then 2023 and 2024 brought a reset: Amazon publicly right-sized its footprint, smaller 3PLs gave back space, and the wave of speculative construction that broke ground in 2022 delivered into a softer market. Rents in tertiary industrial submarkets gave back 10-15% from the 2022 peak, and cap rates expanded with rising interest rates.
By 2026 the picture has stabilized, but it stabilized lower than the 2022 high-water mark. Owners who closed acquisitions or refinanced at peak now hold assets whose assessed value still reflects that peak. If your warehouse or distribution facility was assessed off 2021-2022 comps, the 2026 reality is almost certainly lower — and many assessors haven't adjusted.
Multifamily: Class B/C Suburban Won the Migration
Multifamily had three discrete chapters. The first, in 2020-2021, was a fear of rent-strike contagion and a short-term sunbelt migration that pulled occupancy out of Class A urban product. The second, 2022-2023, was the rent-spike chapter — Class B/C suburban product ran rents up double-digits as inventory stayed tight and people delayed home purchases. The third, 2024-2026, is the cap-rate reset: even though NOI is healthy, the price the market pays per dollar of NOI compressed materially as interest rates rose. The result is that multifamily values in 2026 are uneven — Class B/C suburban often exceeds 2019, Class A urban often sits below — and most assessor models do not distinguish well between the two. That mismatch is the opening for an income-approach appeal.
Parking Garages: The Quietest Casualty
Downtown parking garage revenue is the cleanest single index of CBD recovery, and the data is unforgiving. Daily and monthly parking revenue in Detroit, Cleveland, and Columbus downtowns has settled at roughly 60-75% of 2019 levels — better than the 2020 trough but well short of recovery. That is a direct function of office occupancy: three days in-office means a structural reduction in monthly contract demand, and the leakage to ride-share and remote work doesn't reverse. Assessments that cap-rate the 2019 income stream produce values that are 25-35% too high for 2026 reality. This is one of the cleanest appeal cases on the board right now.
The Assessor's Lag: Why 2026 Notices Still Miss the Reset
The reason a structural 2020-2021 reset is still showing up as an appeal opportunity in 2026 is mechanical. Ohio runs on a six-year reappraisal cycle with a triennial update, which means a 2026 value in many counties was actually set in 2023 against data from 2020-2022. Michigan's annual roll moves faster on paper, but the income-approach evidence assessors actually credit has been slow to incorporate the new cap-rate environment. Indiana's trending factors smooth out year-to-year shocks by design, which is fine for stable markets and lethal when the market actually reset by 30%. Our recent post on Indiana's 2026 trending factors breaks that mechanic down in detail.
Compounding the lag, mass appraisal models lean on grouped market areas. A Class A office tower can get pulled into a neighborhood pool that includes still-occupied medical office and government-leased space, dragging its modeled value above what a single-asset cap-rate appraisal would produce. The fix is not a complaint about the model — it is a property-specific income-approach appeal built around the actual rent roll, the actual operating expenses, and the actual cap rate the market is paying for that asset class in 2026.
What This Means for Your 2026 Appeal
The opportunity is real and time-limited. Three years from now, reappraisal cycles will have caught up, and the easy gap between assessed and market value will close. Right now — for the 2026 tax year — owners of CBD office, full-service urban hotels, downtown parking, regional mall space, and assets refinanced at peak in 2021-2022 should pull comps, calculate income-approach value with a current cap rate, and check the gap. If it's 10% or more, file. Our how-assessors-value-commercial-property guide and cap rate explainer are the two pieces every owner should read before deciding whether the math supports an appeal.
