There is no dispute about the
fact that the Petitioner bought the subject property for $740,000 in June 2007.
The sale of a property is often the best evidence of the property’s market
value-in-use. See Hubler Realty Co. v. Hendricks County Assessor, 938
N.E.2d 311, 315 (Ind. Tax Ct.2010) (finding that the Board’s determination
assigning greater weight to the property’s purchase price than its appraised
value was proper and supported by evidence). In this case, the purchase occurred
on or about June 26, 2007, which is only six months before the January 1, 2008
valuation date for the 2009 assessment. Thus, the Board finds that the Petitioner’s
purchase of the property in 2007 is sufficient to establish a prima facie case
that the property was over-valued for the assessment as of March 1, 2009.
d. On the other hand, the 2007
purchase occurred three years prior to March 1, 2010. Nevertheless, the fact
that the PTABOA determined that the assessed values for 2009 and 2010 were the
same is an indication that market values remained stable and, therefore, no
change would be necessary for the 2010 assessment date. Moreover, the 2012
assessment for the subject property was $780,100, which is relatively close to
the purchase price. Thus, the Board finds that the Petitioner’s purchase price
for the property is sufficient to establish a prima facie case that the property
was over-valued for the 2010 assessment. Consequently, the Board must consider
how effectively the Respondent rebutted or impeached the Petitioner’s case.
e. The Respondent offered a list
of office properties that sold in the state of Indiana between January 1, 2008
and January 1, 2011, and calculated the median price per square foot and the
average price per square foot. In order to compare sales effectively, however,
the proponent must establish the comparability of the properties being
examined. Simple conclusory statements that a property is “similar” or
“comparable” are not probative evidence. Long, 821 N.E.2d at 470. The
Respondent needed to establish the characteristics of the Petitioner’s property,
how those characteristics compared to those of the purportedly comparable
properties, and how any differences affected the market value-in-use. Id.
at 471.
f. The Respondent offered no
evidence or analysis of the specific features of the purportedly comparable
office buildings. Similarly, the Respondent offered no evidence or analysis
about how any differences affected the relative values of the office buildings.
Finally, the Respondent failed to provide a meaningful comparison of the
properties. The Respondent merely calculated the median prices per square foot
and the average prices per square foot for office properties that sold in
Indiana. Because the Respondent failed to identify or value the differences between
the properties, the other sales have no probative value. Fidelity Federal
Savings & Loan v. Jennings County Assessor, 836 N.E.2d 1075, 1082 (Ind.
Tax Ct. 2005) (“the Court has frequently reminded taxpayers that statements
that another property ‘is similar’ or ‘is comparable’ are nothing more than
conclusions and conclusory statements do not constitute probative evidence. Rather,
when challenging an assessment on the basis that the comparable property has
been treated differently, the taxpayer must provide specific reasons as to why it
believes the property is comparable. These standards are no less applicable
to assessing officials.” (citations omitted and emphasis added)).
g. The Respondent also presented
a summary of the case. The summary professed to address the value of the
subject property based on the three approaches to value, but the Respondent
only calculated a value based on the cost approach. The Respondent admitted,
however, that the replacement/reproduction cost of the subject building would
be higher than the sale amount without adding the cost of the land. The
Respondent did not develop values using the income approach or the sales
comparison approach.
h. The Respondent claims that it
did not appear that this investment property was really exposed to a regional
or national market but just the local market. According to the Respondent, this
property would have definitely been marketable on a regional basis and
marketing on a national level would have been advantageous. The Respondent seems
to imply the property would have sold for more had it been marketed to a
broader base of investors. Again, this is merely speculation and does nothing
to effectively establish the value of the property.
i. The Respondent presented MLS
listing information for the subject property as well. The listing information,
dated July 16, 2010, shows the subject property as listed for $999,900.
Nevertheless, a listing for a property that still remains unsold after three
years is not a credible indication of value.
