Needham assessors hear valuation dispute for 1215 Highland Ave after flood damage and measurement discrepancies

The Town of Needham Board of Assessors on May 22 heard an appeal from representatives for the owners of 1215 Highland Ave about a 2025 reassessment, focusing on measurement differences, recent flood damage and repairs, and the assessor’s valuation method.

The issue matters because the property mixes nonprofit space and commercial tenants, the owner-provided income figures differ from the assessor’s file, and the 2025 valuation method changed from the income approach used in 2024 to a cost approach in 2025, producing a substantial increase that the owners say should be revisited.

Danielle Gesto, who identified herself as counsel for the owners, and Paul Ingram, a consultant and former appraiser, told the board they had worked with the property president, Joe McCadney, to update filings and exemptions for the nonprofit portion of the building. Gesto said the building had significant flood damage in a prior year; she and Ingram provided photographs and said four feet of water entered the rear of the building and that the owners used insurance proceeds for repairs. Gesto said the nonprofit activities have resumed, and she listed several recent charitable events hosted at the site.

Ingram identified a discrepancy between the assessor’s stated building area and the owners’ measurements. He told the board the assessor’s building area is recorded as 9,552 square feet while the owners’ materials list first‑floor tenant space of 4,180 square feet and a nonprofit area reported as 6,007.26 (totaling roughly 10,009 square feet as presented to the board). Ingram asked the board to direct a field remeasurement to reconcile the difference.

Ingram also challenged the assessor’s change in valuation method. He said the assessor used the cost approach to produce the 2025 assessed value, whereas the 2024 assessment relied on the income approach. He described the cost approach as uncommon for typical office/retail rental properties and said that, for this property type, the income approach is normally preferred and better reflects market behavior. Ingram highlighted how the assessor’s income tables applied different lease-rate adjustments and vacancy/expense assumptions between 2024 and 2025, producing widely different per‑square‑foot outcomes.

The appraisal discussion included cap‑rate treatment. Ingram said the assessor used a loaded cap rate (which includes the real‑estate tax effect) in one set of calculations and gave the example of a 7.84% loaded cap rate cited in the assessor’s materials; he argued that an unloaded cap rate would be higher and that the effective cap rate applied materially affects assessed value. He proposed an alternative valuation in the range of about $1.5 million using higher (unloaded) cap rates and different vacancy/expense assumptions.

Board members asked about the effect of flooding on value and whether Needham had treated residential properties differently; staff answered that flood effects are handled case by case and that this event was characterized as a “thousand‑year” storm in the materials on file. The assessor‑side staff participation (Stan and Tyler were referenced) provided technical responses about standard vacancy and expense rates applied in the town’s income models and the Department of Revenue recertification that led to using the cost approach for 2025.

The board did not vote on a change to the assessment at the hearing. The members agreed to take the submission under advisement and asked staff to reconcile square footage, cap‑rate assumptions (loaded vs. unloaded), and the income documentation provided by the owner. The board said it would return to the matter after staff review and follow up with the filer.

Members of the public and representatives repeatedly emphasized the measurement discrepancy, the building’s flood history and resulting potential external obsolescence, the mix of nonprofit and commercial uses, and the difference between actual rents the owner reported and the assessor’s projected rents.

The board recorded no formal change to the assessment at the meeting and stated staff would review the materials and report back to the board and to the filer.