Board lowers Route 29 shopping-center assessment after agreeing to recalc rent assumptions

The Albemarle County Board of Equalization on June 16 approved a recalculation of the assessment for a Route 29 shopping center (application number 27, PID 4735), directing the assessors office to use a $30-per-square-foot starting rent for the income approach instead of $37.40.

The assessors staff presented an income and land-value analysis showing the centers supporting land and excess land were previously valued using a higher market rent assumption. The assessor explained the office uses a shopping-center model that applies a benchmark vacancy rate and standardized expense assumptions when owners do not provide fully itemized, certified statements.

"We used retail rents within a mile of the subject property," a county assessor's presenter said, describing the offices use of comparables to establish market rents. The assessor said the office applied an extraordinary-vacancy schedule and used an $8.80-per-square-foot expense assumption plus a 4% replacement reserve, producing a higher valuation.

United Land Corporation, the property owner, objected to the countys rent and expense assumptions. A company representative told the board: "If I was getting $30 a square foot, I would not be sitting in here," and said the owners actual reported average rent for the center was $19.89 per square foot (including $3.50 in reimbursements). The owner said it was impractical to provide segregated, certified expense statements for each center because the company groups expenses across multiple centers.

Assessors said state law provides for certified statements from owners of income-producing properties and that certified statements help the office use applicant-submitted income data more directly. The county said that absent sufficiently detailed and certified expense breakdowns the office adjusts owner-submitted numbers to market-based models.

After discussion, a board member moved to lower the assessors starting rent assumption for the income calculation from $37.40 to $30. The assessor re-ran the model and reported the income-approach value decreased and the total assessed value dropped by roughly $2 million. The board then voted to change the assessment for PID 4735 to a revised total assessment of approximately $11,000,004.73, keeping the excess land value unchanged and lowering the improvement value accordingly.

A motion to change the land value to $8,010,900 and set the improvement value so the total assessment equaled about $11.0 million carried. The board said it may revisit the property if new, certified income-and-expense information or different lease comparables are provided.

The decision followed an extended exchange between assessors and the owner about how to treat upfront tenant incentives, reimbursable common-area maintenance and restaurant leases that can skew market averages. The board asked assessors to remove restaurant comps from the immediate comparable set when rerunning calculations if the board requested it, and staff provided an updated list of comparables during the session.

The reassessed figures will be recorded in the county assessment roll for tax year 2025.