California Commercial Property Tax Industrial

Below is an actual case from an Industrial Property Appeal that was won in Hayward, California:

APPEAL #1997

January 25, 1999

APN:               475-xxxxx

USE:                Industrial

LOCATION:   Hayward

AREA:             44,000 Square Feet

The subject property is located in Hayward.  Situated on 1.88 acres the property was built in 1992 of concrete tilt up construction and has 44,000 square feet.

MARKET APPROACH TO VALUE

Six comparable property sales were located in Hayward occurring between December of ‘95 and March of ‘97.  Because of the diversity of several of these properties, care was taken to adjust the sales price to match the subject.  A detail of the characteristics of the comparable properties is located on the next page with comparable number 1 being the most recent and comparable number 6 being the oldest.

COMP #1

Located two blocks from the subject this property was built in 1987 and consists of concrete tilt-up construction.  Sold in…..

COMP #2

Located approximately 7 miles North of the subject this comparable was built in 1981 and is also concrete tilt-up construction.  The property has….

COMP #3

Located approximately 2 blocks from the subject this comparable was built in 1986 of concrete tilt-up construction.  This comparable has…

COMP #4

Located 7 miles North of the subject this property was built in 1975 of concrete tilt-up construction.  This comp has….

COMP #5

Located 2 blocks from the subject this property was built in 1974 of concrete tilt-up construction.  Located on a ….

COMP #6

Located 4 blocks from the subject this property was built in 1987 of concrete tilt-up construction.  This comp has….

ADJUSTMENTS

Using these comparables we have adjusted sales prices from $34 to $42 per square foot.  We have chosen the average of $37.50 per square foot as fair market value for the 1997 lien date.

3/97 FAIR MARKET VALUE VIA THE MARKET APPROACH

$37.50 X         44,000 SQ.FT.            =          $1,650,000

1997 FAIR MARKET VALUE VIA

THE MARKET APPROACH        $1,650,000

INCOME APPROACH TO VALUE

Rents for industrial property in the area are shown on the comparable detail on page 2…. The Comp on 4001 Whipple was new construction and the owner was offering a $3.50/sq.ft. Tenant Improvement allowance.  As is shown above, rents were in the range of .30 to .39 per square foot Net.  For the purpose of our value determination we have used $ .36/sq.ft. as economic rent.

44,000 sq.ft.     X         .36       = $15,840        X         12        =$190,080

$190,080

VACANCY     5%       9,504

180,576

EXPENSES     5%       9,029

NET INCOME      $171,547

CAP RATE      10.2

$171,547 \ 10.2           =          $1,681,835

3/97 FAIR MARKET VALUE VIA THE

INCOME APPROACH         $1,681,835

RECONCILIATION

MARKET APPROACH $1,650,000

INCOME APPROACH $1,681,835

FULL CASH VALUE $1,665,000