California Commercial Property Tax Retail

The following is an actual L.A. County Assessment Appeal case presented before the appeal board in April of 2000, for a 1998 appeal.  Certain information has been with held or changed.

APPEAL #98-xxxx

April 6, 2000

APN:               6271-xxxx

USE:                Strip Center

LOCATION:   Bellflower

AREA: 17,192 Square Feet

The subject property is located at xxx Boulevard in Bellflower.  Consisting of several buildings on 4 parcels the property has tenants suited for a small strip mall.  The property was purchased for $2,200,000.

At the time of purchase most tenants were in the middle of leases signed at the height of the real estate boom in 1989 and 1990.  Those leases are now expiring.  Replacement tenants are not paying nearly as much and vacant space continues to be a problem…

MARKET APPROACH TO VALUE

Two comparable property sales were located within several miles of the subject area occurring during the time of this valuation.  A detail of the characteristics of the comparable properties follows this chart:

ADDRESS                            DATE     PRICE                    $/SQFT SQ.FT.                   LOT       CAP       Units

SUBJECT                             01/98     $2,300,000+/-      $133       17,231                   47,575                   15

COMP #1

Located just north of the subject on the same street, the strip Center was built in 1987 and sold in January 1998 for $580,000.  The comparable has 7,520 square feet of improvement space on an 18,295 sq. ft. lot….

COMP #2

Located approximately 5 miles south of the subject this comparable was built in 1989 of concrete block covered in stucco.  Sold in August of 1997 for ….

Using these comparables we have sales prices ranging from $71 to $77 per square foot.  We have chosen the average of $74 per square foot as fair market value for the 1998 lien date.

1/98 FAIR MARKET VALUE VIA THE MARKET APPROACH

$74      X         17231 SQ.FT. =          $1,275,094

1998 FAIR MARKET VALUE VIA

THE MARKET APPROACH        $1,300,000

INCOME APPROACH TO VALUE

Rents for commercial property in the area are shown below:

ADDRESS                             YEAR     PROXIMETY        SQ.FT.    $/SQ.FT.                NET/GROSS

1)  15737 Bellflower              1989        1 Miles North        1400        $1.20                       Gross

2)  Subject                             1990                                        1991        $1.21                       Gross

As is shown above, rents were in the range of 1.20 to 1.21 per square foot gross.  For the purpose of our value determination we have used $ 1.20/sq.ft. as economic rent….

17,231 Sq.Ft.   X         1.20     = $20,677        X         12        =$248,126

$248,126

VACANCY     13%     -32,256

215,870

EXPENSES     25%     -53,967

NET INCOME            $161,902

CAP RATE      11.0

$161,902 \ 11.0           =          $1,471,841

1/98 FAIR MARKET VALUE VIA THE

INCOME APPROACH         $1,475,000

RECONCILIATION

MARKET APPROACH $1,300,000

INCOME APPROACH $1,475,000

FULL CASH VALUE $1,475,000