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Board trims Embassy Suites Crystal City assessment after debate over cap rates
Summary
Appellants challenged the county’s cap-rate classification for Embassy Suites Crystal City, arguing it overstated market value; after debate, the Board reduced the 2026 assessed value to $63,080,400 in a 3–2 vote, citing performance and a capped‑actuals approach.
Mr. Rash, representing the owner of the Embassy Suites Crystal City (RPC 35001375, 1393 Southeast Street), told the board the county’s cap‑rate classification groups the 40‑year‑old, tier‑two Embassy Suites with national luxury brands, producing an assessment that overstates market value. "If you make the adjustment and follow PWC’s guidelines… you get basically a just over an 8% going concern cap rate," he said, and added that a recent sale of the Hilton Alexandria yielded a higher going‑concern cap in practice.
County appraiser Mr. Cheekas said the assessor used full‑service hotel cap‑rate surveys and regional performance to set the rate and recommended confirming the county’s revised assessment of $64,118,200. He noted the county’s base rate was ‘‘a bit higher than the national full‑service PWC suggested survey’’ and pointed to multi‑year hotel performance in Arlington as support for the revision.
Board members debated options including capping the assessment to actual performance, raising or lowering cap rates (one board member proposed a 9% compromise), and the relationship between age, amenities and cap‑rate classification. After discussion, a motion to reduce the 2026 assessed value to $63,080,400 — described by proponents as “based on performance and capping out at the current county cap rate” — was moved, seconded by Mr. Pace and passed by a 3–2 vote. The clerk recorded the assessment as reduced to $63,080,400.
The decision reflects a split board view on applying cap‑rate surveys versus performance‑based adjustments for older, tier‑two assets in Arlington’s hotel market. The record shows the board debated both survey methodology and direct market indicators (recent offers and sale comparables) in reaching its decision.
