Laserfiche WebLink
• rentals. The Court understands that this process recognizes that <br />if the owner of the property had to pay all the property expenses <br />without contribution from the tenants, the owner would need to <br />raise the rental rate to net the same income. Petitioner <br />questioned this methodology and argued that income is overstated. <br />We agree with Mr. Patchin's methodology. <br />We disagree with Mr. Patchin's use of $7.50 per sq. ft. as a <br />market rent for the office areas. At page 11 of his appraisal <br />(Ex. No. 105), Mr. Patchin describes the offices as "dated," <br />appearing to be 1973 bank off ices. We find that $6.00 per sq. <br />ft. is more realistic. We accept the rest of his methodology and <br />calculate. an indicated value of $275,000. <br />Giles Lenzmeier, in adapting Mr. Patchin's methodology, used <br />• the actual 1992 rents, changed the amount of reimbursed expenses <br />added to income and added 6.7~ to his capitalization rate to <br />reflect "a return on capital component for a buyer of a <br />business." Mr. Lenzmeier was quite unclear in his explanation of <br />this additional cap rate. We are reminded that Mr. Lenzmeier is <br />not an appraisal or real estate expert and find Mr. Patchin's cap <br />rate to be most credible. <br />Petitioner argued that Mr. Patchin used the wrong tax rate. <br />The same argument was made in the Johnson case. Again, no <br />authority was presented for this argument. Mr. Patchin used the <br />tax rate actually applied to the subject property and we accept <br />his approach. <br /> <br />7 <br />