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Board approves lower commercial valuation after owner and assessor reconcile inputs
Summary
The board approved a negotiated value for a largely vacant office building at 6525 North Marine after the owner's representative and assessor discussed lease-up assumptions, tenant-improvement allowances and cap rates; the parties had been roughly between $2.2 million (owner) and $3.1 million (assessor).
The Oklahoma County Board of Equalization on June 1 heard arguments over the fair-market value of a commercial office building at 6525 North Marine. The owner's representative said the property has been roughly 80% vacant for several years and presented income and lease-up analyses that produced a stabilized market value around $2.2–$2.3 million.
The representative argued vacancy and weak market demand — citing local and national market reports — and walked the board through a lease-up scenario that removed stabilized market vacancy and applied market rents, expenses and tenant-improvement allowances. “Our main concern with this property ... it has been 80% vacant for going out 5 years now,” the representative said, asking the board to set a substantially lower valuation than the assessor’s record.
Assessor staff reviewed the owner's pro forma and questioned some inputs, including a 20% entrepreneurial profit on the lease-up. The assessor ran alternate lease-up assumptions and also reviewed comparable sales; in some analyses the assessor’s figures produced values near $3.0–3.3 million, while other approaches produced lower values when different TI and vacancy assumptions were used. The assessor explained a Marshall & Swift cost approach and said the assessor’s office could support a $2.7 million cost-based figure in isolation.
After discussion and some concessions on inputs (tenant-improvement allowances and lease-up math), the parties signaled agreement on a lower value; the board then moved and approved a motion to set the fair-market value at the figure read into the record. The motion passed by voice vote at the hearing. The board recorded the agreement and closed the item.
