"Given the uncontroverted testimony that sale-leaseback transactions often reflect the sale of more than just real property, the Indiana Board explained that one should approach the rental data from such transactions with caution, taking care to ascertain whether the sales prices/contract rents reflect real property value alone or whether they include the value of certain other economic interests. (See Cert. Admin. R. at 37-38 ¶¶ 57-58.) The Indiana Board determined that because Kerasotes’ appraiser exercised that caution in his income approach, while the Assessor’s appraiser did not, Kerasotes’ appraisal was therefore more probative than the Assessor’s appraisal. (See Cert. Admin. R. at 37-38 ¶¶ 57-58.)
Based on its review of the certified administrative record, the Court does not disagree with the Indiana Board. Indeed, in identifying and utilizing comparable rental properties in his income analysis, Kerasotes’ appraiser avoided those that had been sold in sale-leaseback transactions entirely. (Cert. Admin. R. at 156-58, 539-547.) In contrast, the Assessor’s appraiser indicated that all of his comparables had been sold pursuant to sale-leaseback transactions. (Cert. Admin. R. at 417-22, 424, 711-13.) Moreover, the Assessor’s appraiser never claimed that he made any inquiry into whether those "comparable" transactions involved the sale of real property interests alone or if they too involved the sale of other economic interests. (See, e.g., Cert. Admin. R. at 573-621.)"
Kerasotes Showplace Theatres, LLC
Here is the Board's original determination that was affirmed by the Tax Court:
http://www.in.gov/ibtr/files/Kerasotes_Showplace_Theatres_27-023-06-1-4-00825.pdf
The Board also addressed the "lease fee" interest in Schooler v. Boone County Assessor:
http://www.in.gov/ibtr/files/Schooler_06-003-07-1-5-00444.pdf
