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The $500K Pro Forma Mistake Hitting Brevard County Industrial Buyers

  • Writer: Cassandra Hartford
    Cassandra Hartford
  • May 22
  • 4 min read

A pro forma circulating on social media this week shows exactly how industrial buyers get burned. The stabilized column projects $384,300 in NOI with an 85% margin. Looks phenomenal. One problem: property taxes are missing entirely from the expense stack. According to the analysis shared by @TheRealEstateG6 on X, this single omission is one of the most common industrial property tax underwriting mistakes in the business.

The in-place column of this same pro forma shows $45,000 in annual property taxes on $315,000 of revenue. That's a 14% expense load from taxes alone. The stabilized column? Zero. The total expenses listed drop to $65,700, which is mathematically impossible if you're projecting $450,000 in revenue and keeping the same tax jurisdiction. Someone left out the biggest single expense line.

The Real Numbers Behind the Mistake

Per the pro forma example from the tweet thread, the in-place operation shows Gross Potential Revenue of $350,000, 10% vacancy bringing revenue to $315,000, and total expenses of $100,750. That produces NOI of $214,250 at a 68% margin. The expense breakdown includes taxes at $45,000, insurance at $22,000, management at $15,750, snow removal at $10,000, repairs and maintenance at $4,500, landscaping at $2,000, and utilities at $1,500.

The stabilized projection jumps to $500,000 Gross Potential Revenue, $450,000 after vacancy, and claims $384,300 NOI. But the expense stack only totals $65,700. Management rises to $22,500. Insurance increases to $24,200. R&M goes up to $7,500. G&A appears at $3,000. But taxes? The line is blank. That $45,000 expense just vanished. In reality, stabilized taxes would likely increase, not disappear.

Why This Hits Brevard County Industrial Buyers Hard

Florida is a disclosure state. Sale prices are public record, which means you can look up exactly what a property sold for and use that as your baseline for estimating the new assessed value. For commercial properties in Brevard County, assessed values typically move toward the actual sale price at the point of reassessment. There is no homestead exemption cap protecting commercial buyers the way one protects homeowners. If you purchase an industrial building for $3 million and it was previously assessed at $2 million, expect the county to reassess upward.

Millage rates in Brevard County vary by municipality. Palm Bay, Melbourne, Titusville, Cape Canaveral, and unincorporated Brevard all run different rates, typically ranging from 14 to 18 mills depending on the taxing district. A property in Melbourne might carry a different tax load than the same building two miles west in unincorporated Brevard. You cannot assume the seller's tax bill transfers to you.

The industrial market on the Space Coast is seeing aggressive activity right now. L3Harris, Blue Origin, and SpaceX-adjacent suppliers are driving demand for flex industrial, manufacturing space, and warehouse distribution. Properties are trading at premium cap rates. When a deal looks like a 6% cap, buyers need to verify that the NOI projection is real. A $30,000 annual tax error at a 6% cap translates to $500,000 of phantom value. You're overpaying by half a million for an Excel mistake.

The 3-Step Fix for Brevard County Buyers

Step one: Look up the current property tax bill on the Brevard County Property Appraiser site at bcpao.us. The formula is straightforward. Assessed Value times the mill rate divided by 1,000 equals annual property taxes. If a property is assessed at $2,000,000 and the millage is 16 mills, that's $32,000 per year. Confirm this matches the seller's claimed expense.

Step two: Calculate the new property taxes based on your actual purchase price. If you're buying that same property for $3,000,000, assume reassessment. At 16 mills, your new annual tax bill becomes $48,000. That's a $16,000 increase over in-place. If the stabilized pro forma shows taxes at zero or at the seller's historical number, the NOI is wrong.

Step three: Call the Brevard County Property Appraiser directly at 321-264-6700. Ask specific questions. How often is this parcel reassessed? What is the mill rate history for this taxing district? Are there any tax abatements, exemptions, or CRA incentives attached to this property, and do they transfer or expire at sale? Some properties carry economic development incentives that terminate when ownership changes. That tax bill can jump significantly on day one of your ownership.

RCRE Take

I see this mistake constantly. Not because buyers are careless. Because the pro forma they receive from the seller or listing broker was built to sell, not to inform. The stabilized column is a projection of what could be, and some projections are more creative than others. Property taxes are boring. They don't make the investment story more exciting. So they get minimized or omitted.

In a market like Brevard County right now, where aerospace demand is pushing industrial vacancy below 5% in some submarkets, the competition for deals is fierce. Buyers want to believe the numbers. They want to close. That's exactly when underwriting discipline matters most. A $384,300 NOI looks very different than a $324,300 NOI when taxes are properly accounted for. At a 6% cap, that's a million-dollar swing in value.

Every industrial buyer on the Space Coast should be running their own tax calc before making an offer. Not after. Before. If you're working off the seller's pro forma without verifying taxes independently through bcpao.us, you're underwriting their optimism, not the actual deal.

Submarket Context

Industrial properties in the Melbourne, Palm Bay, and Rockledge corridors are seeing the most activity from aerospace-adjacent tenants. Flex industrial buildings under 20,000 square feet are particularly competitive. If you're evaluating deals in these submarkets, tax verification is non-negotiable. Review current industrial listings on the Space Coast and note that every property will have a different tax profile based on its specific municipality and taxing district. Our resources page includes due diligence guidance for commercial transactions in Brevard County.

If you're buying or selling industrial property in Brevard County, get the tax math right before you sign anything. Call 321-514-0876 or reach out through our contact page. I'd rather spend 20 minutes on the phone now than watch you overpay by six figures.

Industrial warehouse building with metal siding and loading dock doors in central Florida

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