Class A Shopping Center

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Case Study

Wilson & Franco saved the property owner over $2.7 million dollars in Property Taxes.

Issue

The Appraisal District utilized the Alternate-Cost approach to value the subject property and declined to consider the income approach. The appraisal district’s method failed to consider the legal permissibility and financial feasibility of this valuation approach. In doing so, the Appraisal District refused to consider the shopping center’s actual financial performance as well as other factors that influence market value. As such, the taxable value of the shopping center increased 66% from the previous year causing serious financial strain for both the owner and its tenants.

Case Position

The appraisal district’s cost valuation failed to consider the expenses associated with valuing the land as though vacant and the financial implications of redevelopment while long term leases were tied to the property. The most appropriate approach to value this property in its current state is through the income and sales approach.

Results

The case position was taken to a jury trial and an expert report conducted by a MAI appraiser was presented in support of the case position reflecting an income and sales approach. The jury verdict was in favor of the property owner which resulted in tax refunds totaling approximately $2.7 million.

$2.7 Mil
tax refund