Indiana Administrative Code › Title 50 - DEPARTMENT OF LOCAL GOVERNMENT FINANCE › Article 30 - MARKET SEGMENTATION OF REAL PROPERTY IMPROVEMENTS › Rule 4 - Examples of Appropriate Comparable Sale Properties › Section 4-1 - Examples

Current through July 10, 2024
Authority: IC 6-1.1-31-1; IC 6-1.1-31-6
Affected: IC 4-22-7-7; IC 6-1.1-31-6
Sec. 1.
(a) The
				following examples illustrate how to identify comparable sale properties for
				use in a sales comparison analysis:
(1)
				Subject Property is a big-box property (that is, a freestanding building in
				excess of fifty thousand (50,000) square feet with minimal interior divisions
				that is used for retail purposes). In an appraisal of the property, an
				appraiser cited several properties for use as comparable sales, all of which
				are big-box properties. Four (4) of the properties were sold to subsequent
				users for continued use as retail properties, though they were originally built
				for the retail use of the initial users. All four (4) properties are used for
				retail purposes both presale and post-sale and are situated in the "general
				retail" market. However, the fact that all four (4) properties were used for
				retail purposes both presale and post-sale does not necessarily mean that they
				are comparable sale properties. Additional evidence would be needed to
				determine whether the four (4) purportedly comparable sale properties have a
				different market or submarket than the current use of the Subject Property.
(2) Subject Property is a big-box
				property originally built, owned, and occupied by a national department store
				chain. The Subject Property is located on a major traffic corridor (corridor)
				approximately one-quarter (1/4) mile from an interstate highway but is not
				visible from that highway. The Subject Property is only accessible by a private
				road intersecting the corridor. Appraisals relied in part on two (2) sale
				properties. The sale properties, big-box retail stores used by a furniture
				outlet store and an electronic and appliance store operator, respectively, are
				visible from the interstate, but they can only be accessed by a street
				intersecting the corridor. Notwithstanding their differences in location and
				proximity, it is possible that the sale properties could be used to determine
				the true tax value of the Subject Property. Additional evidence would be needed
				to determine whether the two (2) purportedly comparable sale properties have a
				different market or submarket than the current use of the Subject
				Property.
(3) Same Subject Property
				as in subdivision (2), except the appraisal used as sale properties include:
(A) a former grocery store located in the
				same metropolitan area as the Subject Property that was demolished shortly
				after sale;
(B) a big-box retail
				store, which was demolished shortly after the sale and was located in another
				city, that served as an anchor store to an unenclosed mall; and
(C) a big-box retail store converted to
				multitenant use after the sale also located in a different city.
Although the sale properties and Subject Property may have
				  been appropriately classified within a "general retail" market prior to the
				  time of sale, the sale properties may fall into a different submarket following
				  their sale because the sale properties were put to a use following their sales
				  that is different from the current use of the Subject Property. Additional
				  evidence would be needed to determine whether the three (3) purportedly
				  comparable sale properties have a different market or submarket than the
				  current use of the Subject Property.
(4) Subject Property is a freestanding
				department store, owned by a national retail chain and built to the
				specifications of the owner-company. An appraisal used nine (9) sale properties
				as comparable sales. These sale properties were all freestanding department
				stores, owned in fee simple, located outside Indiana, vacant at the time of
				sale, and were sold for continual retail use. Here, the fact that the sale
				properties were located outside Indiana and vacant at the time of sale is not
				sufficient to disqualify them from serving as comparable sale properties in a
				sales comparison analysis. However, the fact that the sale properties, like the
				Subject Property, were owned in fee simple and used for retail purposes is also
				not sufficient to determine whether the sale properties reflect the true tax
				value of the Subject Property. Additional evidence would be needed to determine
				whether the nine (9) purportedly comparable sale properties have a different
				market or submarket than the current use of the Subject Property.
(5) Subject Property is a light manufacturing
				facility, where the operator manufactures plastic components for the automotive
				industry. In its sales comparison approach, an appraiser relies upon three (3)
				comparable sale properties, which are designated as Sale Comparable 1, Sale
				Comparable 2, and Sale Comparable 3. Two (2) of the comparable sales are of
				light manufacturing facilities, with the operator of Sale Comparable 1 using
				the property to manufacture wooden frames and trusses for the housing industry
				and the operator of Sale Comparable 2 using the property to manufacture
				handheld electronic devices. Sale Comparable 3 is used by the operator to
				manufacture metal piping for the oil and gas industry, considered a heavier
				manufacturing use. The three (3) comparable properties have many physical
				characteristics common for light and heavy manufacturing facilities,
				respectively. Additional evidence would be needed to determine whether the
				three (3) purportedly comparable sale properties have a different market or
				submarket than the current use of the Subject Property.