Owners and assessor spar over occupancy, cap rates and lease type at hearing for 120 N. Rockwell valuation

Property representatives for a Class B flex‑industrial complex at 120 North Rockwell told the Board of Equalization on June 15 that the building’s occupancy (roughly 55–60% in recent years) and lease structure make current market value materially lower than the assessor’s informal figure.

The appellant presented an income‑based appeal anchored to recent operating statements and rent rolls and said a loaded cap rate and a vacancy‑adjusted income approach justify a value near $5,236,100. Their representative said the building cannot currently support permanent debt because it remains partially stabilized and that repair, tenant‑improvement and lease‑up costs should be deducted from a stabilized income estimate.

The assessor responded with a market approach that used recent local sales and a cap/expense framework; the assessor said an income analysis using a full‑building rental rate and an assumed market expense ratio produced an initial estimate above the owner’s figure and after lease‑up adjustments offered an informal valuation in the $6.7–6.9 million range and said ongoing work might refine that further.

The exchange focused on three technical issues: whether comparables used triple‑net leases and how to adjust for modified‑gross lease reimbursements; the appropriate cap rate for a non‑stabilized flex‑industrial asset in the local market; and the magnitude of lease‑up costs. The board said it would take the record and deliver a written decision after its Thursday meeting; no final value was set in open session.

The parties were directed to expect a mailed decision following the board’s work on Thursday.