Dixie & Her Uncle’s Appeal


Dixie Phair, Commercial Real Property Analyst for Any Municipality County, would definitely have recused herself, but the only other staff member with commercial experience is on extended leave.

So, a somewhat close family member (Jack Phair, Dixie’s uncle) is across the conference room table from Dixie, with the Hearing Officer’s transcription in full operative mode:

Jack: I don’t get it. My store is the same it’s always been, yet the taxes over the past five years have shot up and my tenant is upset!

Dixie: Sir, would you agree that the value of your retail property has risen significantly over this period?

Jack: Well sure, Missy, the market has come back after the recession. And it helps that the city rerouted Main Street right past my storefront. Both of those occurrences were not of my doing, though!

Dixie: Sir, we certainly agree you are not at fault, but please consider that your tenant benefits from not only the improved market in general, but also the greatly increased exposure from the relocation of Main Street.

Jack: Well if they have benefited, they haven’t told me. But it does make sense, I grant you.

Dixie: Just to clarify how the Assessor has tried very hard to equitably assess retail property over the years, I have prepared this simple chart of rents, vacancy, and cap rates used in our income model for your property in the first four recession years:

Year Rent Per
Sq Ft
Vacancy
Rate
Overall
Cap Rate
2008 $14.50 8% 7.75%
2009 $14.50 10% 8%
2010 $13.50 12% 8.5%
2011 $13.00 14% 9%

My point is that your tenant was given appropriate relief during the down years based on locally verified market data relevant to the property type, tenant design, size, condition, appeal, and location. Also, please don’t forget how the immediate location has changed.

Jack: Actually, this is good information. May I show them this? I think it should cool them off. Appeal withdrawn, Missy!

Another crisis averted through application of the principle of equity.

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