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Petitioner’s witness Mr. Rexroth determined that it would cost
$602,000 to replace the shopping center building and site
improvements. From this amount, he deducted approximately
$193,000 to reflect depreciation and obsolescence. He then added
back his estimate of the value of the land upon which the
shopping mall was located to arrive at a cost value of $503,000.
On behalf of the respondent, Mr. Bollinger presented a
valuation of $639,000 for the building and other improvements, a
deduction of $173,000 for depreciation and obsolescence, and an
addition of $120,000 reflecting his valuation of the vacant land.
His cost-basis total valuation was $585,000.
We believe that Mr. Rexroth’s valuation is closer to the
mark. His higher "external" obsolescence figure reflects the
property’s historical difficulty in filling vacancies and in
finding retail tenants. Taking this form of obsolescence into
account, we think that a fair cost valuation would be $530,000.
We have concluded that a proper valuation for the property
under the comparable sales valuation method is $528,000. The
capitalized earnings approach yields a value of $490,000. Under
the replacement cost method, the proper value is $530,000. Of
the three methods, we give the greatest weight to the capitalized
earnings approach. We agree with Mr. Bollinger’s opinion that
the income approach resulted in the most accurate valuation
because an “investor purchasing this building would be basing it
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