Owners of San Francisco’s office towers, shopping centers, hotels and homes are flooding the county with appeals to slash their property assessments — and tax payments — as real estate prices sink in the beleaguered city.

Some of the world’s biggest landlords, including Brookfield Corp. and Blackstone Inc., have filed for assessment cuts. The volume of such appeals have doubled in the three years since the pandemic. Assessments for this fiscal year went out in early July, and new appeals are expected to surge before a Sept. 15 deadline to request reductions.

“It’s like drinking from a fire hose,” said Mark Ong, founder of Independent Tax Representatives, whose firm filed appeals on about $11 billion of San Francisco property for the last tax year. “I’ve done this 37 years and I’ve never had a year like this one.”

The volume of appeals shows the broader impact of the real estate downturn in cities such as San Francisco, where office workers, shoppers and tourists have been particularly slow to return after the pandemic. Reduced assessments can lower tax revenue for city services from police to homeless aid. And a recognition by assessors that property values have plunged only adds fuel to a potential doom loop of disinvestment, where indebted owners walk away from buildings rather than pour money into assets that are worth less than they paid.

For the fiscal year ended June 30, San Francisco tax filers asked for an average 48% reduction on property assessed at more than $60 billion, according to filings with the city’s assessors office compiled by Bloomberg. The values encompass taxable business items such as fixtures and vehicles, though the bulk of the dollar figures being appealed is tied to land and building assessments.

Of the 2,420 appeals heard by the board in the 12 months through June, about 55% received a reduction.

The city already faces a $780 million budget deficit through 2025, forcing Mayor London Breed to raid her reserves and leave vacant jobs unfilled, among other belt-tightening measures. San Francisco's latest budget assumes the city will be forced to refund $167 million to property owners over the next two fiscal years due to appeals.

“The assessments are going to be challenging, but we’re going to have to adjust to that,” Breed said in an interview last month at City Hall. “And we will.”

San Francisco is far from alone as landlords across the country grapple with shifts in real estate demand and rising interest rates that have sent building prices tumbling. Assessment appeals have also risen in Los Angeles, Chicago and New York.

Offices in New York may lose an estimated 44% of their pre-pandemic value by 2029 because of the impact of remote work, according to a joint study from researchers at New York University and Columbia University. They typically account for about 20% of the city’s property-tax revenue.

“In New York, everybody protests their taxes,” said Jay A. Neveloff,  a real estate attorney with Kramer Levin in Manhattan. “It’s like a right of passage. But this time it’s really justified.”

For San Francisco, the property forecasts are even more dire: Prices for office towers may plunge as much as 60% from pre-pandemic levels, according to Boston Consulting Group. Owners of the city’s largest shopping mall, two of its biggest hotels and two office buildings controlled by investment giant Pacific Investment Management Co. stopped making mortgage payments this year rather than hold onto money-losing properties.

Meanwhile, the median San Francisco home price sank 16% in June from a year earlier, and residential sales volume dropped almost 17%, according to the California Association of Realtors.

“San Francisco is clearly in the first inning” of this price downturn, said Michael Covarrubias, chief executive officer of San Francisco-based developer TMG Partners and former head of the Bay Area Council, a group of business leaders focused on the region’s economic vitality.

So far, the city has avoided a major hit to its property-tax rolls, which climbed 4.6% to $340 billion for the fiscal year starting July 1. That’s partly because of increases to assessments of long-held real estate, which are still playing catch-up to the boom years because of a law that limits assessment hikes to 2% annually. The last time total assessments fell was in the mid-1990s, following a US recession.

Landlords aren’t waiting for city assessors to catch up with the times. Brookfield requested a 75% reduction in the value of the office tower at 685 Market St., which it bought in 2013. It’s seeking a 68% assessment reduction for One Post St., according to filings with the appeals board. Both appeals, which were filed last year, are still pending. Brookfield declined to comment.

Columbia Property Trust, a landlord acquired by Pimco in 2021, asked for 50% reductions on three office buildings, one of which is part of the portfolio that stopped making mortgage payments in January. A spokesman for Columbia declined to comment.

Others asked for more modest discounts. Blackstone requested cuts ranging from 20% to 25% on three office buildings near the San Francisco waterfront. Apartment landlord Equity Residential filed appeals for reductions of as much as 20% on five properties in the latest two tax years.

Initial reassessment requests are often “placeholder” numbers, because agents for property owners don’t have time to accurately analyze all the properties filing appeals, Ong said. It’s advantageous to ask for a bigger reduction at the outset than to take a conservative position and appeal for a deeper discount later, according to Nick Fogle, a principal with Ryan LLC, the largest property-tax advisory firm in the US.

“There’s probably never been a larger disconnect between appeal outcomes and current assessments,” said Fogle, who’s worked on cases for 15 years. “We have a third-party appraisal for an office building in the city that shows an over 80% decline from its assessed value. That’s the first time I’ve ever seen that.”

Some appeals came ahead of bigger troubles. The owners of the Westfield San Francisco Centre on Market Street received a roughly 40% cut in the mall’s assessment in March. In June, Unibail-Rodamco-Westfield and Brookfield said they were giving up the property to lenders, citing the “declines in sales, occupancy and foot traffic.”

Early this year, Park Hotels & Resorts Inc. withdrew an appeal to cut the assessment of the Hilton Park 55 San Francisco hotel by almost half. In June, the landlord said it stopped making payments on a $725 million mortgage on the Park 55 and Hilton San Francisco Union Square hotels.  The city’s pandemic recovery may take as long as seven years, Park Hotels CEO Thomas J. Baltimore said on an Aug. 4 call with investors.

"I, like many others, believe that San Francisco will recover," Baltimore said. “It's just going to take longer, and there are real structural impediments and challenges there that we're all aware of.”