- 24 -
upwards by 2.998 percent to account for the over assessment. No
justification for the magnitude of the increase is given in the
report. We can find no justification for this adjustment and are
unpersuaded that this methodology is correct.
In contrast, Mr. Bollinger has assumed that the new owner
would seek to have local officials revalue the property with a
resulting decrease in property taxes.
We believe that Mr. Bollinger’s analysis more properly
reflects the projected net annual earnings of the shopping mall
property, with the exception of his assumption that the vacancy
rates would be reduced drastically. When we include a vacancy
rate of 12 percent in arriving at a number for projected net
annual income, we arrive at a figure of $56,428.
We also believe that Mr. Rexroth’s capitalization figure of
11.5 percent is closer to the mark than Mr. Bollinger’s 11
percent. The shopping mall was slightly more disadvantaged in
its location on its site when compared to the Latina restaurant.
We therefore believe that Mr. Rexroth’s slightly higher
capitalization rate is appropriate to use in valuing the shopping
mall. Our conclusion produces the result that, under the
capitalization-of-earnings approach, the value of the shopping
mall property is $490,000.
Finally, each appraiser utilized similar methods to produce
a cost replacement analysis for the retail shopping property.
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011