Fort Wayne Portfolio relies on
the Overholt’s hearsay appraisal reports and on the price for which it bought
Executive Center and Pointe Inverness. As explained above, the Board cannot
base its determination solely on the hearsay, so it turns to the sale price for
the two properties. A property’s sale price can be compelling evidence of its 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 a property’s purchase price than to its appraised
value was proper and supported by the evidence). Fort Wayne Portfolio bought
Executive Center and Pointe Inverness for $5,100,000 as part of a single
transaction after CBRE had actively marketed the properties for a year. And the
sale occurred less than four months after the relevantMarch 1, 2011 valuation
date. Fort Wayne Portfolio therefore made prima facie case that the two
properties were worth a combined total of no more than $5,100,000.
The Assessor challenged the sale
price on two grounds: (1) that the seller, GE Credit, was atypically motivated
due to statutory and regulatory limits on how long it could hold the property,
and (2) that the transaction was a portfolio sale with no probative evidence showing
how to allocate the sale price among the four parcels under appeal. Neither of those
challenges persuades the Board.
As to the first ground, the
Assessor claims that Executive Center and Pointe Inverness qualified as REO
property and were therefore subject to federal statutes and regulations prohibiting
national banks from holding such property for more than five years. The Assessor
argues that GE Credit acted under duress when it sold the properties because
the five-year holding period was close to expiring.
The Assessor’s position, however,
rests on a faulty premise—that GE Credit was required to sell the properties
within five years. The statute that the Assessor cites—12 U.S.C. § 29—provides
an exclusive list of purposes for which a national banking association may purchase,
hold, and convey real estate, including property that an association “shall purchase
at sales under judgments, decrees, or mortgages held by the association, or
shall purchase to secure debts to it.” 12 U.S.C. § 29. The statute further
provides “[n]o such association shall hold the possession of any real estate
under mortgage, or the title and possession of any real estate purchased to
secure any debts due to it, for a longer period than five years except as
otherwise provided in this section.” Id.
But 12 U.S.C. § 29, which is part
of the National Bank Act, applies only to national banking associations. The
same is true for the regulation that the Assessor cites, which governs “other
real estate owned.” 12 C.F.R. § 34.82 (referring to the period in which a “national
bank” must dispose of “OREO”). While it appears that a national banking association,
LaSalle Bank,3
took
title to the properties as trustee for a “pooling and servicing agreement” in
2007, the Assessor’s own exhibits show that LaSalle Bank transferred the
properties to GE Credit in 2008. See Ex. R-2. GE Credit is the entity
that sold the properties to Fort Wayne Portfolio for $5,100,000. And the Assessor
offered nothing to show that GE Credit is a national banking association.
Indeed, the only evidence that the Assessor offered to support the notion that
Executive Center and Pointe Inverness were subject to the National Bank Act are
hearsay printouts from Loopnet’s website characterizing the transaction between
GE Credit and Fort Wayne Portfolio as a “Bank sold/REO Sale.” Ex. R-5.
Even if one assumes that GE
Credit is a national banking association and was therefore required to sell the
properties within five years, the evidence does little to show that the requirement
affected GE Credit’s motivation as a seller. Although Williamson characterized
the sale as having occurred shortly before the end of the National Bank Act’s five-year
holding period, GE Credit actually sold the properties only four years after
they were transferred to LaSalle Bank, and only three years after GE Credit
acquired title. And GE Credit actively marketed the properties through a
national real estate company for approximately a year before selling them. The
Assessor offered nothing to dispute that such a marketing period was
commercially reasonable for the type of property at issue.
Turning to the Assessor’s second
claim, the Board agrees that there is no competent, probative evidence to
support any particular allocation of the sale price between Executive Center
and Pointe Inverness, much less to support an allocation among the four individual
parcels comprising those properties. Although the amended sales disclosure forms
purport to allocate the sale price between Executive Center and Pointe
Inverness, there is nothing to show the basis underlying that allocation.
Regardless, the evidence shows that the combined market value-in-use of the
properties is $5,100,000.4
The
assessments must therefore be changed so that they total no more than
$5,100,000. The Board makes no finding regarding how the Assessor should
allocate that total between the parcels.
http://www.in.gov/ibtr/2536.htm
