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Board of Equalization upholds Rosslyn Residence Inn assessment after cap-rate dispute
Summary
After debate over which PwC cap-rate category applies to the Residence Inn in Rosslyn, the Arlington County Board of Equalization unanimously confirmed the county's $59,065,600 assessment. Appellant argued reclassification would change the cap rate by 50 basis points and lower per-room value.
The Arlington County Board of Equalization unanimously confirmed the county ssessment of $59,065,600 for the Residence Inn in Rosslyn following a contested hearing about which cap-rate category should apply.
Appellant representative Mr. Harmon told the board the property should be treated as limited service but "upper midscale" (select service) rather than midscale, arguing that the assessment's base cap rate of "8.092%" should be adjusted to reflect the chain-scale classification used in the PwC survey. Harmon said reclassifying to the higher chain scale would reduce the assessment by about 50 basis points and lower the per-room assessed value to roughly $317,000, moving it closer to recent hotel sales.
County presenter Mr. Chiges defended the county's approach, saying county staff had "nailed" their original projections and noting that the base rate was "actually 8.072, not 8.092," while pointing to multi-year NOI history and national and regional survey data to support staff calculations. He told the board the county's worksheets demonstrated only a modest year-over-year decline in value and asked the board to confirm the assessment.
Board members asked for examples of hotels the county classifies as limited, select and full service to clarify the appropriate PwC comparables. Several members said they were reluctant to expand the county's four-category framework (full, select, limited, lodging) into a larger number of subcategories. After discussion, the chair moved to confirm the county assessment; the motion was seconded and the vote was unanimous.
The board's decision preserves the county's methodology and the $59,065,600 assessed value. The matter concluded at the hearing; no further action on the case was recorded at the meeting.
