2025_12_17 BOER Minutes - Laserfiche WebLink

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Docusign Envelope ID:OA23A6A2-42FE-4EAO-B414-FA2F89F77BF7 Property Owner S V Center LLC Appellant(if different) Property Address 410 Market Street Unit Parcel ID or Abstract 9787055943 400 Statement of Appeal: Request reduction in value based on an independent fee appraisal. Current Assessed Value $10,618,700 ounty Opinion $9,877,200 Time of Hearin 9:50 AM Appellant Opinion $9,000,000 County Representative Roger Gunn Board Decision $9,877,200 Evidence submitted by the appellant: • The appellant is requesting a reduction in value based on an independent fee appraisal as of January 1, 2025,with an indicated value of$8,910,000 from the sales comparison approach, $9,070,000 from the income approach and a reconciled value of$9,000,000. Evidence submitted by the county representative: • The appellant has submitted an appraisal into evidence. Generally speaking,the document aligns with the County's schedule of values and is considered reasonable evidence. However, there are three key points that seem to create a greater difference in the County assessment and the owner's estimate of value than might otherwise exist. 1.) The appraisal downplays the retail component of the property,which includes long-term tenants such as Town Hall Grill and Rasa. There is over 26%retail in this building,which has lower vacancy rates and capitalization rates than office spaces enjoy. CoStar Market Reports show that near end 2024 vacancy sat at 1.3% in Orange County. There was very little new construction and asking rates were on the rise. 2.) It doesn't give enough credit to the walkable location,which is considered very desirable for office space. It is considered one of the main amenities that separates desirable from undesirable office locations. 3.) The property has a large amount of medical office space. UNC Medical is a significant tenant. Medical office buildings(MOBS)greatly outperform typical office in terms of vacancy, rents and capitalization rates. Per CBRE,the leading global commercial real estate firm, on a national basis 2024 vacancy was 5% lower for MOB than conventional office, rents were higher and capitalization were at least 0.5%lower. A sheet of local capitalization rates is included by the County with 205 Sage Road and 930 Martin Luther King, Jr. Boulevard being worthy of special interest. • The County income approach utilizes the same income as the appraisal but adjusts the vacancy from 10%to 5%to better reflect the medical and retail nature of this walkable building. Expenses are similar. The capitalization rate is adjusted to 7%from 7.5%to acknowledge the property's strengths with an indicated value of$9,885,181. As a result,the County recommends changing the land's market adjustment from -50%to -55%and increasing the economic depreciation from 12%to 18% on the building. This would result in a revised value of$9,877,200. • Location Map of Subject • Current Property Record Card(6 pages) • Proposed Property Record Card(6 pages) • Income Approach • Comparables for Office Capitalization Rate Motion of the Board I Accept Count 's Proposed Value: $9,877,200