Estate of Duilio Costanza - Page 24

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          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.               

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