The Cook County assessment system for income-producing property runs on the logic of the income cap strata.Subclass dictates vacancy percentages and cap rates. Tax district codes dictate expense percentages.

By applying the tax estimation formulas of both the Assessor and the Board of Review, we can calculate taxes, measure the gap between them, and back into the operating expense percentage applied per property. This is where hidden NNN leases begin to surface.

Macro-analysis, powered by data science, is often a process of navigating ambiguity. The information is incomplete, the leases are not labeled, and the operating expense percentages often come pre-filled from opaque sources. To make sense of it, you work through messy data until the patterns reveal themselves.

When people talk about regressive taxes, the usual idea is simple: poor people pay a bigger share of their income than rich people. That is true with property taxes in Cook County, but the reality runs much deeper. There are three hidden layers of regressivity at work, and they stack on top of each other.

What the Equalizer Is Supposed to Do

Illinois law says property is supposed to be assessed at one-third of market value, 33.33%. That’s the statewide target. In most counties, it’s simple. But Cook County runs on a classification system. Residential starts at 10% of market value. Commercial starts at 25%.

To bring the county average back in line with that 33.33% target, the Illinois Department of Revenue applies a single multiplier each year called the equalizer.

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Understanding the Triennial Reassessment Schedule in Cook County:

Cook County uses a triennial reassessment system, meaning each property is reassessed every three years. The county is divided into three districts:

• City of Chicago
• North Suburbs
• South Suburbs

Appeal Results and Invoice Calculation

Most real estate tax firms operate on a contingency basis, meaning they only earn their fee if they achieve a successful reduction in assessed value. The contingency fee is calculated based on the estimated tax savings, which is determined using the following formula:

Assessment Value Difference × Latest Tax Rate × Latest County Multiplier = Estimated Tax Savings

Lack of Uniformity:

Properties are intended to be valued in an equal fashion per assessment metrics. Thus, they are intended to be assessed ‘uniformly’, by law. Determination of assessment equity is made by first calculating the ‘building assessment value per square foot’ of the subject property and then analyzing the same of its comparable properties. If there are a substantial amount of comparables with a lessor ‘building assessment value per square foot’, that serves as an indication of assessment inequity.

Sales Comparison:

What someone is willing to pay is the best indicator of market price. Thus, assessment values are intended to be in-step with the latest sales activity. There is a clause within the tax code that an assessor cannot ‘sales chase’. In other words, they may not increase a properties assessment to be in align with the most recent sales price that’s higher than the established assessment fair market value. However, there isn’t a regulation negating sales chasing downward. The determination of market equity is made by first calculating the ‘market value per square foot’ of the subject property and then analyzing the same of its comparable properties. If there are a substantial amount of comparables with a lessor ‘market value per square foot’, than that of the subject property it serves as an indication of market sales inequity.

Township/County Assessor Level Appeal

There are three levels of appeal, per Illinois county. The initial level is with the township assessor for counties outside of Cook County or the county assessor for Cook county. Turnaround time, a few months.

Board of Review Level Appeal

The second level of appeal is with the Board of Review, per county. In Cook County, the Board of review has an initial review and then a subsequent “Re-Review” procedure. Turnaround time, a few months.