When an out of state buyer purchases an asset, we have seen that this sale is not always a portrait of a true market transaction. In this instance, the property was 100% leased and we believe the buyer paid a premium. Is it possible to have a valuation for a year come in under a market transaction?


A buyer purchased a Texas retail shopping center for roughly $17,500,000. This data was public to the local county assessor, and typically that number provides the future value. One of the large anchor tenant’s had not been paying rent for the previous three months leading up to our negotiation period with the county. The strip center on paper was also 100% leased.


It is difficult when a sale is transacted because ultimately the county sees that sale as a market transaction. However, we needed to base our argument on a different approach, the income of the property. Counties typically see the rent roll of a property and when it is 100% leased, they won’t allow much vacancy if any in the valuation. In this case, our team was able to leverage the fact that the anchor tenant was behind on rent and was able to get a larger vacancy factor applied to the property.


The proposed value on the strip center was the purchase price, $17,500,000. Our total settled value without litigation was $16,520,000, or a tax savings of a little over $21,000.

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