Section 50 IAC 30-4-1 - ExamplesAuthority: 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. (b) The examples listed in subsection (a) are for illustrative purposes only and are not intended to be exhaustive. The department may provide additional examples in its directives on real property or other guidance, including memoranda, pursuant to IC 4-22-7-7(a)(5) as authoritative interpretations of this rule.Department of Local Government Finance; 50 IAC 30-4-1; filed 11/13/2017, 11:10 a.m.: 20171213-IR-050170173FRA, eff 1/1/2018