The Petitioner relied on a
comparative market analysis (CMA) that compared four commercial property sales
from the relevant time frame and estimated a value of $576,200 for the subject
property. In order to compare sales effectively, the proponent must establish
the comparability of the properties being examined. Simple conclusory
statements that property is “similar” or “comparable” are not probative evidence.
Long, 821 N.E.2d at 470. The Petitioner needed to establish the characteristics
of its 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.
The Petitioner, however, did
little to compare the properties in the analysis other than to make some very
basic observations on quality of construction and location. The Petitioner
failed to adjust the sale prices to account for differences. Furthermore, it is
not clear how the Petitioner arrived at a $576,200 value. Because the
Petitioner failed to show that this methodology complied with generally
accepted appraisal principles, the CMA carries little or no weight.
The same observations apply to
the evidence relating to the 2502 Calumet property. The Petitioner again
presented no meaningful comparison of the similarities and differences of the
properties. Consequently, the selling price does not help to prove an accurate
valuation for the Petitioner’s property.
The Petitioner also presented an
income capitalization approach to value for the subject property. Ms. Ruiz made
those income capitalization calculations. Therefore, the credibility of her
work and valuation opinion is critical. Several things, however, negatively
impact that credibility. More specifically, Ms. Ruiz has an interest in the outcome
of this appeal because she is compensated on a contingency basis. She is not an
appraiser and her calculations do not purport to be a certified appraisal. Even
though her testimony and income capitalization calculations resemble the kind
of thing appraisers commonly do, under these circumstances, her opinion does
not have the kind of impact an independent, professional, certified
appraiser/appraisal might have. Her income capitalization calculations merely
relied on income and expense numbers from RealtyRates market survey to get an
average NOI of $6.94 per square foot. She then calculated a total NOI on 7,324
square feet of space, even though the building has 9,500 square feet with the
second floor area. Although she testified that the second floor is not leasable
space due to damage, she presented only minimal, conclusory evidence of that
fact. This kind of methodology to determine NOI for the subject property at
$50,829 is not credible. Perhaps more significantly, the Petitioner failed to
establish that the income capitalization evidence it offered conforms to the requirements
of generally accepted appraisal principles. Therefore, the purported value
based on that approach lacks credibility and is not probative evidence for this
case.
http://www.in.gov/ibtr/2536.htm
