Cody Realty, LLC v. Borough of Carteret

NOT FOR PUBLICATION WITHOUT APPROVAL OF
THE TAX COURT COMMITTEE ON OPINIONS

TAX COURT OF NEW JERSEY

MALA SUNDAR Richard J. Hughes Justice Complex
PRESIDING JUDGE P.O. Box 975
Trenton, New Jersey 08625-0975
609 815-2922, Ext. 54630 Fax 609 376-3018

November 16, 2021
Robert Guanci, Esq.
Waters, McPherson, McNeill, P.C.
Attorneys for Plaintiff

Ted Del Guercio, III, Esq.
McManimon, Scotland & Baumann, LLC
Attorneys for Defendant

Re: Cody Realty, LLC v. Borough of Carteret
Block 2702, Lot 25
Docket Nos. 002251-2014, 001524-2015, 000908-2016, 000940-
2017, 004541-2018, 002212-2019, 001237-2020
Dear Counsel:

This letter constitutes the court’s decision following trial of the above-captioned matters

involving plaintiff’s challenge for tax years 2014 through 2020, and defendant’s challenge for

tax years 2018 through 2020,1 to the local property tax assessments imposed on the above

referenced property (Subject). The primary disagreements between the parties’ appraisers were

the appropriate valuation methodology, and treatment of the portion of the Subject’s lot which

is being used for outdoor storage of trucks/automobiles and/or additional parking.

For the reasons explained more fully below the court agrees with plaintiff’s appraiser that

the income approach is a viable valuation methodology for the Subject. However, the court

rejects his value conclusions under this approach for all tax years because (a) his concluded

potential gross income for the Subject is unpersuasive due to his failure to review any of the

leases or lease abstracts of rentals he used as comparables; and (b) his concluded values for tax

1
The Borough withdrew its counterclaim for tax year 2017 as untimely filed.

ADA
Americans with
D isabilities A ct
ENSURING
AN OPEN DOOR TO

JUSTICE
years 2019 and 2020 did not include value attributable to the income producing portion of the

Subject’s lot (leased for billboard use). The court therefore accepts defendant’s appraiser’s sales

comparison valuation method. However, it rejects his +20% adjustment to the comparables’ sale

prices for the Subject’s lot area being used for storage/additional parking, as unsubstantiated.

Accepting his other adjustments (as modified), rejecting certain comparable sales, and increasing

the capitalization rate for the billboard portion of the lot, the court finds the value of the Subject

for each tax year as $2,561,280; $2,820,480; $3,108,480; $3,252,480; $3,270,770; $3,558,770;

and $3,990,770. Applying the corresponding Chapter 123 ratios (except for tax year 2017 due

to a district-wide reassessment and as to which the Borough withdrew its untimely counterclaim),

the court reduces the assessment for tax year 2014 to $2,506,470, increases the assessment for

tax year 2018 to $3,270,770, and affirms the assessments for all other tax years.

SUBJECT DESCRIPTION

The Subject is a lot measuring five acres or 217,800 square feet (SF). It is in the Light

Industrial (LI) zone. Three easements run through it: a 10ʹ wide sanitary sewer easement; a 15ʹ

wide drainage easement; and a 20ʹ Middlesex Water Company Right-of-Way (which cuts across

the lot). It is improved by a circa 1977 building in average condition with 28,800 SF of gross

building area (GBA) made up of warehouse and office space, with a clear ceiling height of 18ʹ

in the warehouse/repair portion. The land-to-building ratio (LTBR) is 7.6 (217,800 SF land ÷

28,800 SF building). The floor area ratio (FAR) is 0.13 (28,800 SF building ÷ 217,800 SF land).

There are 21 bay doors for access into the service area.

The Subject is used in furtherance of a towing and repair business. Towing is done for

the New Jersey Turnpike Authority. The aerial view of the Subject shows a significant portion

of the lot (paved and unpaved) with several parked vehicles, including towed and repaired

2
vehicles, trailers, and tow trucks. One of the tow trucks is identified with a signage of the

business. The building also has a signage of the business’ name and services provided (“tires,”

“collision,” and “repair” for trucks).

Another portion of the lot contains a two-sided, non-digital billboard, which is clearly

visible when travelling on the New Jersey Turnpike. It is leased to an unrelated third party under

a contract originally signed in March 1996 at $25,000 per annum with a 5% increase every five

years.2 For tax year 2019 onwards, defendant’s assessor segregated the assessment for the

billboard and separately identified it with a qualifier (Block 2702, Lot 25, B01).3

VALUE CONLCUSIONS

Each party proffered its real estate appraiser’s value opinion, which was accepted by the

court as an expert opinion. Plaintiff’s appraiser used an income approach because he viewed the

Subject as one “typically traded based on its income generating potential,” and “leased on the

open market.” He used 21 triple net leases of warehouses with start dates ranging from 2011 to

2019, two of which were in the defendant (Borough), and five in Avenel, a submarket in the

Borough. Leased areas ranged from 10,000 SF to 37,260 SF, and the per SF (PSF) rents ranged

from $4.92 to $9.12. He used CoStar, which, he testified, was a credible data source particularly

for lease information, and the data when verified with a leasing agent would be 90% accurate.

Therefore, he stated, he did not need to personally review the leases he chose as comparables.

2Plaintiff appears to have assumed the lease as the document shows Ho Ro Realty as the landlord.
3
See Division of Taxation, Real Property Appraisal Manual For New Jersey Assessors, 230 (3rd ed.
2021) (“For identification purposes, billboards should be identified by the block and lot numbers
assigned to the land on which the billboard is located and the qualification code “B” followed by the
numeric.” The assessor should report the billboard’s assessment as a “new line item” and “as an
improvement value only”).
3
Selecting leases with start dates closer to the valuation dates, he arrived at a PSF rent for

each tax year at $5.50; $5.50; $6; $6.50; $7; $7.50; and $8. He deducted the potential gross

income (PGI) for each tax year by a vacancy and credit loss at 7.5% (tax years 2014-2016) and

5% (tax years 2017-2020). He then added the billboard rental income ($28,941 for tax years

2014-2016 and $30,388 for tax years 2017 and 2018) to compute the effective gross income

(EGI). For tax years 2019 and 2020, he noted that “the billboard was separated as its own lot,”

and he did not value it since he was retained to value only Lot 25.

After deducting 12% of the EGI for expenses (5% each for management and leasing

commissions; 2% for reserves), he capitalized the resulting net operating income (NOI) at 7.3%;

7.3%; 7.2%; 7%; 6.9%; 6.9%; and 6.8% for each tax year, using the band of investment method.

The Borough’s appraiser used the sales comparison approach because, he opined, “the

likely buyer” would be an “owner-user” considering the Subject’s current use and maximal

utility of its lot. He used sales of warehouses (ten for tax years 2014-2017, nine for tax years

2018-2020) located in central New Jersey (including two in the Borough), several of which were

purchased for owner-occupation. Sale dates ranged from 2009 to 2019, lot sizes from 1.15 acres

to 4.35 acres, and GBA from 12,650 SF to 150,400 SF.

Using a PSF of GBA as the unit of measurement, he first adjusted the comparables(s)

sale price(s) for market conditions. He then adjusted for LTBR differences at +20% (higher the

LTBR, more the flexibility, ample parking, “better on-site circulation and potential building

expansion”); and at 5% for differences in amount of office space, doors/bays count, condition,

and location. His value conclusions, at a PSF amount, were $90; $95; $110; $115; $125; $135;

and $150 for each tax year 2014-2020. To his value conclusions, he added the value of the

billboard under an income approach. For all tax years, he opined the billboard’s PGI as $30,000

4
based on five comparable leased billboards, with most weight to a two-sided, non-digital,

billboard in Hackensack (leased at $30,600 per year) as it was located by Intestate 80, a heavily

traveled highway like the Turnpike. With 3% allowance for vacancy/collection loss, and 4% for

operating expenses for tax years 2014-2017 (2% each for management fees and reserves) but at

6% for tax years 2018-2020 (3% each for management fees and reserves), he capitalized the NOI

at 6% (tax years 2014-2018) and at 6.25% (tax years 2018-2020).

A summary of the assessments and value conclusions follow:

Tax Year 2014 2015 2016 2017 2018 2019 2020
Assessment $2,594,100 $2,594,100 $2,594,100 $2,933,800 $2,933,800 $2,933,800 $2,933,800
(billboard (billboard (billboard (billboard (billboard +$470,000 +$470,000
included) included) included) included) included) $3,403,800 $3,403,800
Plaintiff $2,120,000 $2,120,000 $2,310,000 $2,620,000 $2,830,000 $2,620,000 $2,830,000
(no (no
billboard) billboard)
Borough $2,590,000 $2,740,000 $3,170,000 $3,310,000 $3,600,000+ $3,890,000+ $4,320,000+
+ $470,000 + $470,000 + $470,000 + $470,000 $440,000 $440,000 $440,000
$3,060,000 $3,210,000 $3,640,000 $3,780,000 $4,040,000 $4,330,000 $4,760,000

FINDINGS

(A) PRESUMPTION OF CORRECTNESS

Imposed assessments are presumptively correct. MSGW Real Estate Fund, LLC v.

Borough of Mountain Lakes, 18 N.J. Tax 364, 373 (Tax 1998). This is “a construct that expresses

the view that in tax matters, it is to be presumed that governmental authority has been exercised

correctly and in accordance with law.” Pantasote Co. v. City of Passaic, 100 N.J. 408, 413 (1985)

(citations omitted). The burden of overcoming the presumptive correctness is upon the party

challenging the assessment’s validity. Ibid.

At the end of plaintiff’s proofs, the court denied the Borough’s motion to dismiss the

complaints and ruled that plaintiff had overcome the presumption of correctness of the

assessments. Having done so, the court now need not separately determine “whether” the

Borough has also “overcome the presumption with respect to [its] counterclaim[s]” for tax years

5
2018-2020. See MSGW, 18 N.J. Tax at 378. The court will therefore evaluate whether the

presented evidence suffices to change the assessments at issue.

(B) VALUATION

(1) Highest and Best Use (HBU)

Plaintiff’s appraiser’s report noted that the Borough’s LI zone permitted various

industrial and commercial uses, thus, the Subject’s use was legally conforming in that “industrial

garage use” is permitted in the LI zone, and because the Subject met “all the necessary lot size

requirements.” He insisted that the LI zone did not permit external storage, but only vehicle

parking, therefore, the Subject’s lot was, and could only be used, for additional parking.

His report noted that “[i]n the context of most probable selling price (market value),

another appropriate term to reflect [HBU] would be most probable use. In the context of

investment value, an alternative term would be most profitable use.” He concluded that the

Subject’s HBU as vacant was “for development of an industrial facility.” As improved, the

Subject’s HBU was “continuation of the existing use” which “embodies the most profitable and

productive use,” there being no alternative use “that would economically justify the removal of

the existing improvements.”

The Borough’s appraiser’s report noted that the permitted uses in the Borough’s LI zone

were industrial, office and research. He insisted that the LI zone permitted parking and external

storage, and that the vehicles on the Subject lot were stored since towed vehicles were charged

for storage. His report stated that the minimum lot size was one acre with 50% maximum site

coverage and opined that the Subject “appears to be legally nonconforming.” He concluded that

as vacant the Subject’s HBU was for the “development of the site for industrial use” and as

improved, is its “continued industrial use.” His report noted that the improvement on the Subject

6
was an “industrial building,” and that due to the “size and characteristics of the” Subject, the

most probable buyer would be an owner-user. In his land analysis, his report also noted that the

Subject is a “truck service facility with ample on-site parking and outdoor storage areas” thus,

the “site accommodates this use well.” Similarly, in his improvement analysis, his report noted

that the current “improvements adequately support the operation as a truck service facility.”

The Borough’s zoning code requires towed vehicles to be kept in a “secured storage area

. . . in an area legally zoned for such use.” Zoning Code §238-6(D)(1)(d).4 As to the LI zone,

the code permits “screened storage and warehousing.” Id. §160-135(A)(3). Accessory uses

include “enclosed warehousing and storage of goods,” and “garage space necessary to store any

vehicle on premises.” Id. §160-135(B).

Both appraisers agreed that the Subject’s HBU as improved is for the continuation of its

present industrial use. Neither opined that the Subject had any other financially feasible or

maximally productive alternative use. The LI zone allows for screened storage and warehousing.

Therefore, and regardless of their interpretation of whether the vehicles on the Subject’s lot are

“stored” or “parked,” or their disagreement as to the lot’s potential buildability, the court agrees

that the Subject’s HBU as improved is for its current use.5

4
The Borough’s zoning code defines “outside secured” area as “[a]n automobile storage facility that
is not indoors and is secured by a fence, wall or other man-made barrier that is at least six feet high.
The facility is to be lighted at night.” Zoning Code §238-1. “Outside unsecured” area is defined as
“[a]n automobile storage facility that is not indoors and is not secured by a fence, wall or other man-
made barrier and all other storage facilities not defined above as inside building or outside secured.”
Ibid.
5
Plaintiff’s appraiser’s reservations of buildability due to easements notwithstanding, he concluded
that the Subject’s “development . . . for uses consistent with existing zoning is financially feasible.”
The Borough’s appraiser’s opinion of a 100,000 SF potential build-up notwithstanding, he concluded
that there was no “alternative use that could reasonably be expected to provide a higher present value
than the current use,” and testified that this potential build-up was included to support his market
demand analysis for industrial use property.
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(2) Appropriate Valuation Methodology

Each appraiser disagreed with the other’s chosen valuation methodology, and whether

the Subject’s LTBR adds more value to a buyer owner-occupier. Plaintiff’s appraiser opined

that if the Subject were to become vacant, it would be considered a rental (investment) property

since the industrial market generally, and in the Borough, is one of rentals. Thus, he stated, the

income approach was most appropriate, with several warehouse comparable leases but no

warehouse comparable sales. He also opined that since the three easements severely restricted

the Subject’s future buildability and the Subject lot could only be used for additional parking per

the Borough’s zoning, the lot size does not add any value. Plus, he noted, there was no market

evidence to adjust the comparables for differences in FAR/LTBR.

The Borough’s appraiser opined that the sales comparison approach was most

appropriate since a probable buyer would be one like plaintiff, i.e., an owner-occupier desiring

fully utility of an ample lot space in furtherance of the buyer’s business. This conclusion, he

testified, flowed from the HBU of the Subject as improved was for the continuation of its present

use. He opined that the income approach “does not reflect the primary analysis undertaken by a

typical owner-user,” which here was the intense and full use of the Subject’s lot as is currently

being done. He noted that value of industrial properties has been steadily increasing in the

Borough as evidenced by the increasing rents of competing properties (warehouses/distribution

centers), and that the Subject was an extremely attractive candidate for sale given its favorable

location (amongst industrial/commercial properties, close to the Turnpike), and its leasable

billboard. He testified that the Subject was developed and improved for maximal outdoor

storage, therefore, it was proper to increase the sale prices of almost all comparables since they

lacked external storage and/or ample on-site parking.

8
Valuation of an owner-occupied industrial property is not necessarily tied to one method.

“Even in the case of owner-occupied properties, the income approach may also be applied.”

S.I.R. Educational Fund, Industrial Real Estate, 467 (4th ed. 1984). See also M. I. Holdings, Inc.

v. Jersey City, 12 N.J. Tax 129, 138 (Tax 1991) (“warehouses are commonly rented by their

owners as investment property,” therefore “the income approach is a viable method of valuing

them”) (citation omitted).

The sales comparison can also be a viable approach for owner-occupied industrial

properties. Industrial Real Estate, 450 (sales comparison approach “most nearly represents the

views and often the decisions” of the market participants, therefore, can be “the best one to

employ” for valuing improved industrial property). Cf. Shulton, Inc. v. City of Clifton, 7 N.J.

Tax 208, 217 (Tax 1983) (rejecting the income approach as an appraiser would have to “construct

an amalgam of attenuated hypotheses concerning economic rent, projected expenses, whether

the leases would be gross or net, whether the property is best suited for a single tenant or multiple

tenancies and the anticipated return on investment”).6

Here, both appraisers concluded the Subject’s HBU as improved was for the continuation

of its present “industrial” use and deemed the Subject as a warehouse since both used only

warehouses as comparables.7 The Subject is located amongst predominantly industrial-use

properties which were mostly rented. Indeed, the Borough’s appraiser’s market analysis studies

were based on the rent comparisons and vacancy rates (based on net absorption) of what he

6
The Borough’s appraiser’s hybrid approach is also not facially improper. See Aliotta v. Twp. of
Belleville, 27 N.J. Tax 419, 427 (Tax 2013).
7
Industrial property is defined as “land or land and improvements adaptable for industrial use;
ideally, a combination of land, improvements, and machinery, which is integrated into a functioning
unit intended for the assembling, processing, and manufacturing of finished or partially finished
products from raw materials or fabricated parts, such as factories; or a similar combination intended
for rendering service, such as laundries, dry cleaners, or storage warehouses.” N.J.A.C. 18:12-2.2(f).
9
termed as “warehouse/distribution comparable properties,” and his report included 29 rented

warehouses in the Borough/Avenel market (different from the seven triple net leases in the

Borough/Avenel used by plaintiff’s appraiser). The data thus evidences an identifiable rental

market for the Subject and tends to support plaintiff’s appraiser’s opinion that the income

approach is more credible because the Borough’s industrial market is in rentals. That each

appraiser differed in their opinion of the usability of the Subject’s site size is an issue of whether

an adjustment for differences in LTBR is justified. Such adjustment can be accomplished under

either method, thus, is not a reason to deem either value approach as more credible than the other.

(3) Value Conclusions

Unfortunately, the court finds plaintiff’s income approach problematic for the reasons

explained below. Thus, while more appropriate as a methodology here, it does not carry the day.

i. Plaintiff’s Appraiser’s Failure to Review/Analyze Leases or Lease Abstracts

A primary problem is the credibility of plaintiff’s appraiser’s conclusion of the Subject’s

PGI due to his failure to peruse and review any of the leases. Lease 2 was for a one-year term

starting September 2012 and ending August 2013. He used this as a comparable for tax years

2014 and 2015, however, as of the assessment date for tax year 2015 (October 1, 2014), this

lease had expired. He failed to explain why the lease, regardless of its expiration, is a credible

value indicator, or why an adjustment for time was unwarranted (the lease had the lowest rent at

$4.92 PSF. Leases in January 2013, June 2014, and July 2014 were at $5.50 PSF to $6.25 PSF).

Lease 3 had a start date of September 2012, and no end date. It was also used as Lease

7, which had a start date of October 2014 after being on the market since April 2013 and

reportedly vacant for 10 months. It then appears that Lease 3 which started September 2012 was

10
a six-month lease which expired April 2013. If so, it is questionable whether it is reasonable to

use the lease for tax years 2014 and 2015.

Lease 7’s start date was reported as October 2014. Plaintiff’s appraiser used it as a

comparable for tax year 2014 (which has an assessment date of October 1, 2013). It had no end

date, and was used as a comparable for tax years 2015 and 2016. Does it mean it had a two-year

term? The same issue, i.e., start date but no end date on the CoStar summary lies with Leases

11 (used for tax years 2017 and 2018), 13 (used for tax years 2017-2019), 15, (used for tax years

2018-2020) and 16 (used for tax years 2018-2020). How is the court assured that these are viable

comparables for the tax years at issue?

Another problem is plaintiff’s appraiser’s uncorroborated conclusion that the “starting

rent” reported in CoStar is the flat rent for the entire lease term. Whether this was in fact the

case is unknown since he did not review any of the leases. And while this may be a reasonable

supposition where the lease is for a one-year term (see e.g. Lease 2 which was for a one-year

term and only included a starting rent of $4.92 PSF), it is not so for longer periods. For instance,

Lease 6 commenced in 2015 for a ten-year term (used by the appraiser for tax years 2014-2016).

CoStar noted the starting rent was $5.25 PSF, which was also the “effective rent.” Lease 14

commenced in 2018 for a ten-year term (used by the appraiser for tax years 2018-2020). CoStar

noted the starting rent was $6.75 PSF, which was also the “effective rent.” It is difficult to

suppose that a lease stayed flat for the entirety of its ten-year term, when there is no definition

or explanation of what CoStar means by “effective rent,” and when plaintiff’s appraiser testified

that the industrial market saw a marked upward change from 2017 onwards (which is why he

used 7.5% as a vacancy rate only until tax year 2017). Indeed, Lease 20 appears to corroborate

11
his testimony of an upward market: it was for a seven-year term beginning 2019 with rents

subject to escalations in “steps.”

The court also questions the credibility of using leases with no end date, and for which

CoStar reports only a starting rent. See e.g. Leases 3, 7, 11, 13, 15. If the court were provided

sample leases or lease abstracts, it may have been persuaded by plaintiff’s appraiser’s testimony

that starting rents stayed flat through the lease term. Such documents were not provided (let

alone reviewed by plaintiff’s appraiser).

While CoStar may be widely used by real estate appraisers and be deemed to publish

reliable data, it does not, as plaintiff’s appraiser testified, justify the lack of the need to review

and verify the CoStar data with each of the comparable leases. See VBV Realty, LLC v. Twp.

of Scotch Plains, 29 N.J. Tax 548, 567 (Tax 2017) (while data such as from CoStar “may be a

valuable starting point for identifying likely comparable properties . . . it is the process by which

an appraiser verifies the accuracy of that data and information that is the hallmark of an effective

appraisal report and sound opinion of value”); 90 Riverdale, L.L.C. v. Borough of Riverdale, 27

N.J. Tax 328, 338, n.11 (Tax 2013) (“There is an imperative need for an appraiser to verify the

factual accuracy of the data relied upon to develop value estimates, as the validity of the

appraiser’s conclusion depends upon the accuracy of the factual data upon which it is based”)

(citation and internal quotation marks omitted); Appraisal Institute, The Appraisal of Real Estate,

385 (14th ed. 2013) (“referencing the source of secondary data only confirms its existence and

does not verify the transaction”). While plaintiff’s appraiser testified that he had verified almost

all of the above identified leases, the testimony is not credible. If he had verified the CoStar

data, these issues would not arise, or if arose, would have been credibly explained.

12
Also problematic is plaintiff’s appraiser’s use of a comparable’s starting rent even when

CoStar indicates it had escalations. Lease 1 commenced January 2012 and ended December

2016, with rent escalation in “steps.” The “starting rent” was $5.50 PSF. It would be logical to

assume that as of October 1, 2013, and/or October 1, 2014 (the two tax years he used this lease

as a comparable), the rents would be higher due to the escalations. Or maybe the escalation was

in the lease’s third year. However, the appraiser used a flat $5.50 PSF for both tax years with

no explanation in this regard.

The same is the situation with Lease 18 (used by the appraiser for tax years 2019 and

2020) which commenced April 2018 for a five-year term and had escalations in “steps.” Did the

step-up could occur as of October 1, 2019, the lease’s second year? Or did it occur in its third

year? Again, without reviewing the actual lease, it is difficult to agree that the rent for Lease 18

remained at the “starting rent” of $6.95 PSF for tax years 2019 and/or 2020.

Similarly, Lease 16 which commenced December 2017 (for an unknown term, but per

plaintiff’s appraiser was a renegotiated renewal), escalated at 2.5% per year. He used this lease

for tax years 2018 through 2020. Should the court assume that since the appraiser only used the

starting rent for each tax year, there were no escalations for any tax year? A review and

verification of the lease terms would have answered this question. -
Cf.
- Lease 20, with a seven-

year term. CoStar reports it as having a start rent of $9.25 PSF but an effective rent of $9.12

PSF (presumably because the escalations were in “steps” however it is unknown how CoStar

computes the effective rent). Plaintiff’s appraiser used $9.12 PSF in his analysis.

The court is unpersuaded by plaintiff’s appraiser’s opinion that there is no difference

between the start date rent and an effective rent, and that concessions or build out had no effect

on the net rent. Plaintiff’s decision to use the CoStar reported start or effective rent without

13
verifying the why’s of the same or of the escalations and impact on the rent over a lease’s term

renders unpersuasive his conclusion of the Subject’s PGI. See First Republic Corp. of America

v. Borough of East Newark, 16 N.J. Tax 568, 578-79 (Tax 1997) (“where income changes are

known, as is the case with step-up leases, those increases in income, to the extent they reflect

economic rent, should be reflected in the appraiser’s estimate of the property’s future income”

and that rent concessions should “be considered in the development of the income analysis”).

The first step in the income analysis is a credible conclusion of the Subject’s PGI. The

court finds this lacking. Therefore, it need not (and cannot) analyze the remaining steps to

determine whether plaintiff’s appraiser’s value conclusions nonetheless survive scrutiny. VBV

Realty, LLC, 29 N.J. Tax at 567 (“when an appraiser does not properly source, verify, and

analyze that data and information to ensure the integrity of the opinions of value derived

therefrom, those conclusions are not credible evidence of market rents” therefore, the appraiser’s

“income capitalization conclusions . . . are entitled to little weight”).

ii. Plaintiff’s Appraiser’s Failure to Value Billboard Income for Tax Years 2019-2020

Billboards “are deemed to be real property” and are “subject to local property taxation.”

N.J.S.A. 54:4-1.20; N.J.A.C. 18:12-10.2(e). Therefore, the accepted methodologies apply to

their valuation. See Real Property Appraisal Manual For New Jersey Assessors, 236 (“As with

the appraisal of other real property for local property tax purposes, the three accepted approaches

to value (income, sales comparison, and replacement cost less depreciation) are applicable to the

valuation of billboard structures”). If an income approach is used, then “economic rent must be

applied” else it “will not yield credible results.” Ibid.

Here, plaintiff’s appraiser maintained that billboard leases were unattainable, therefore,

he used the Subject’s billboard lease, although it was entered in 1996 with 5% annual step-ups.

14
The testimony is not credible because the Borough’s appraiser was able to obtain such leases.

However, the court has rejected plaintiff’s appraiser’s conclusion of PGI, thus, this issue is moot.

More troublesome is plaintiff’s appraiser’s decision to not value the billboard portion of

the Subject’s lot for tax years 2019 and 2020. It is true that the Borough’s assessor identified

the billboard with a qualifier (B01) for tax years 2019 onwards. However, this does not mean

that a separate lot was created for the billboard. Rather, the qualifier is required as an

administrative measure so that all income from the property is captured. See n.3.

There is simply no evidence that the Subject’s lot was subdivided into a new lot, or that

a new lot was created on the Borough’s tax map comprising the billboard. Identification of the

billboard portion by a qualifier does not change the Subject’s status as a single economic unit

for valuation purposes.8 Omitting to include the billboard’s value equates to valuing less than

all the bundle of rights in the Subject which is an improper valuation of a fee simple real estate.

In sum, the court agrees with plaintiff’s appraiser that an income approach is a viable

valuation methodology for the Subject. However, it rejects his value conclusions under this

approach for all tax years as his PGI conclusions were unpersuasive, and also because he did not

value the income producing (billboard) portion of the lot for tax years 2019 and 2020.

iii. The Borough’s Appraiser’s Value Conclusions

The court accepts the Borough’s appraiser’s sales comparison approach, which as noted

above, is also a viable valuation methodology for the Subject. Initially, the court rejects some

of his comparables. Two of those are at 333 Cantor Avenue (sold June 22, 2017, for $4,000,000,

and used for tax years 2018, 2019), and 330 Dalziel Road (sold November 21, 2019, for

8
That the parties’ respective Case Information Statements for tax year 2020 (but not for tax year
2019) identify the qualifier as being included in the appeal does not require a conclusion that the
billboard portion of the Subject is a separate, non-contiguous, independent economic lot.
15
$3,950,000, and used as a comparable for tax year 2020). Both sales were tenanted when sold

(four tenants in 333 Cantor Avenue, and two tenants in 330 Dalziel Road), thus, the sales were

of a leased fee. A property’s leased fee value can be materially influenced by the leasehold

interest, tenant quality, and the stream of rental income. Therefore, their sale price raises are not

necessarily credible value indicators.

The Borough’s appraiser’s report noted that “all land sales represent the conveyance of

fee simple property rights. Therefore, no adjustment is necessary for this factor.” He testified

that he did not verify the leases or lease income for either sale, however, he claimed, the leases

in-place were at market. As to 333 Cantor Avenue, he stated that this was evidenced by his

capitalization (Cap) rate analysis in his report, but his report did not contain this information as

to this comparable. Note that the sale was marked NU26 because it was an I.R.C. §l031 exchange.

The appraiser was unaware of this since he did not review the contract of sale or deed on the property.

As to 330 Dalziel Road, his report noted that the leases were nearing expiration in 2020, and the

buyer intended to either increase the rents or re-lease the space at market to new tenants. On

cross examination, he stated that he recalled hearing that some leases had expired in 2020, and

the rents were either renewed or were at market. Sans corroboration with the old and new leases,

it is difficult to agree that the in-place leases were actually renewed, or the property was re-

leased. Therefore, it is also difficult to simply accept that the property’s sale price is a credible

indicator of the Subject’s value. His lack of review of the leases (in place when sold, or post-

sale), also renders unpersuasive his opinion that the sale’s low implied Cap rate (5.56% based

on a “projected” NOI of $220,899) is evidence of at-market renewals or new leases.

The court also rejects the following three comparables because they involve sales of

multiple lots. These types of sales are problematic when there is no verification as to allocation

of the sale price. See Industrial Real Estate, 430 (appraisers should “be careful not to place too
16
much emphasis on purchases of adjacent sites as ‘comparable data.’ Industrial plant users often

pay premium prices for abutting properties because this can be the only way they can obtain land

for expansion or parking”). One is 3001 S. Clinton Avenue in South Plainfield (sold March 26,

2015, for $2,525,000). Although the CoStar data summarized in the Borough’s appraiser’s report

shows only one lot being sold, the sale deed provided by plaintiff showed that the sale included

several additional lots in Piscataway. The Borough’s appraiser was unaware of these lots since

a former employee of his company had, in 2017, verified only one lot. The appraiser also

conceded that inclusion of several lots could impact the sale price.

The second sale is 7 Progress Street in Edison (sold October 4, 2016, for $1,975,000).

The CoStar data summarized in the Borough’s appraiser’s report shows the sale as including two

lots. The appraiser was unaware of this fact. The court is unpersuaded by his bare testimony

that inclusion of two lots does/did not impact this comparable’s sale price. An additional

problem is that he was unable to verify whether its zone R-I (Restricted Industrial) was

comparable to the Subject’s LI zone. Permitted uses in the R-I zone do not list warehouse or

distribution centers. Edison Zoning Code §37.31.1. Nor are they identified on the conditional

use list. Id. §37.31.4.

The third sale is 50 Ingham Avenue in Bayonne (which sold December 12, 2018, for

$7,000,000). CoStar data notes the sale as involving two lots, 5 and 6. While the appraiser’s

report indicates the sale was confirmed with the buyer’s broker, there was no explanation

whether the sale price covered one or two lots, and if so whether the sale price is a credible value

indicator of one lot (like the Subject).9 Therefore, the court rejects these three sales. See The

9
The NJACTB website (www.njactb.org) identifies Lot 5 as Class 1 (vacant land), and Lot 6 as
Class 4B (improved industrial property).
17
Appraisal of Real Estate, 385 (“[g]enerally, the secondary sources do not provide adequate

information . . . if multiple properties were involved in the sale” therefore, it is imperative to

ascertain the accuracy of published data).

Next, the court agrees with the appraiser that sometimes a larger LTBR in an industrial

property can have more value to a buyer/tenant. See e.g. Brockway Glass Co. v. Twp. of

Freehold, 10 N.J. Tax 356, 369 (Tax 1989) (“industrial properties must have [LTBR] that allow

plenty of space for parking, truck maneuvering, yard storage, and expansion”) (citation and

internal quotation marks omitted). This can be a basis for justifying adjustments “between

comparable sales properties and the subject property.” Industrial Real Estate, 428.

As noted above, the Borough’s zoning code requires towed vehicles to be kept in a

“secured storage area” which is “in an area legally zoned for such use.” Zoning Code §238-

6(D)(1)(d). Its LI zone permits “screened storage and warehousing.” Id. §160-135(A)(3).

Accessory uses include “enclosed warehousing and storage of goods,” and “garage space

necessary to store any vehicle on premises.” Id. §160-135(B). As evidenced by the pictures in

the appraisal reports, the Subject’s lot is externally fenced and being used for vehicular storage

(and tires), while the building is being used for internal storage of repair equipment and

accessories. Thus, the Borough’s appraiser’s opinion that the Subject’s maximal productivity to

a prospective buyer (investor or owner-occupier) is the ability to fully use the site as is currently

being done, is reasonable. Therefore, his further opinion that ability to use the Subject’s entire

lot is a superior feature requiring adjustments to comparables lacking the same is also reasonable.

However, the appraiser has failed to persuade the court that the adjustment for LTBR

differences should be at +20%. This quantification is purely subjective. In theory it is reasonable

to presume that a buyer would pay more if the lot size can fully and intensely be used (as here,

18
for external storage or if a warehouse, for extensive parking of, and turning width for, delivery

trucks), because rents for warehouses were steadily increasing in the Borough (and in general)

at least since 2017. However, some evidence of this theory is needed to support the adjustment.

For instance, he disputed plaintiff’s appraiser’s statement that Amazon began to buy/use

lots/land to park its fleet of trucks for a “last mile distribution”10 from or after 2020, contending

this occurred in 2013. If so, he could have used rentals or sale prices of such properties or lots

as evidence for the +20% adjustment, even if the lots were located outside the Borough (just as

he used comparable sales from outside the Borough). Lots leased for outdoor storage or

additional parking such as overflow of inventory of a car dealership could likely have been used

to support the +20% adjustment. This was also not done.

The comparables he used also do not comport to his theory. He testified that a probable

buyer of the Subject would be an owner-occupier like plaintiff which will want and can obtain

maximal site usage, i.e., for external storage of personal property, since this analysis flowed from

his HBU analysis. However, his comparable, 7 Parkway Place (located in Edison, which sold

September 26, 2011, for $3,780,500 and used for tax years 2014, 2015) was purchased for the

building’s size. Per the appraiser’s report, the buyer from China contracted to buy the property

within an hour of its virtual tour and, while some “users don’t need interior loading,” the “buyer

preferred it,” and although a “building this size 50,400 sf, is not regularly available for sale in

this market,” it was “perfect for a buyer who needs that size,” therefore, “the sale price represents

a value to an owner user and not necessarily an investor because the property was perfect for the

buyer’s needs.” These comments indicate that the outdoor parking or storage was not as crucial

10
“Last mile distribution” is the last step in the distribution process, which is delivery of the goods from
a distribution center to the end user.
19
to the buyer as was internal loading and storage. Yet, the Borough’s appraiser applied the +20%

adjustment. If the buyer of a warehouse has no need for outdoor storage or parking, rather uses

the property only for indoor storage (because the products are such which cannot, and need not,

be externally stored), then, the buyer may not find the Subject competitive. There was no

evidence that buyers of the appraiser’s comparable warehouses lacked a much-needed extensive

outdoor storage.

If the Subject’s lot was superior due to additional and ample parking, then the appraiser’s

adjustment at +20% for property at 50 Ingham Avenue in Bayonne is questionable. This property

is noted as having a FAR of 0.36, which the appraiser’s report notes, “allows for ample surface

parking.” He nonetheless applied the +20% adjustment. Therefore, the court finds it difficult to

agree that, without more, the buyer’s status as an owner-occupier and the mathematical

calculation of the LTBR or FAR, justifies a +20% adjustment.

The court accepts the adjustments for number of bay doors (except for sale of 6 Connerty

Street, East Brunswick, which had 16 loading docks and 5 bay doors thus, and as the appraiser

testified, should not have been adjusted. Data on sales of 15-19 Evans Terminal, Hillside, and

10 Production Way, Avenel, did not include bays/docks count); condition; and location. There

was nothing to refute the reason for, or the reasonableness of, their provision.

The court also accepts the Borough’s appraiser’s income approach for the portion of the

Subject’s lot generating billboard income for all tax years. However, it disagrees with his Cap

rate of 6% for tax years 2014-2017 and 6.25% for tax years 2018-2020. His reports did not

elucidate the basis for the rates, and his testimony was that it was based on the market analysis

data in the reports. For tax years 2014-2017, the industrial market information in his report

pertaining to industrial properties did not include any Cap rates. Both appraisers’ reports

20
however contained the RERC Cap rates for second-tier industrial properties,11 which as of the

third quarter (Q3) of 2013-2016 was 8.2%; 8.1%;7.9%; and 7.7%. For Q3 of 2017-2019

(included in plaintiff’s appraiser’s report), it was 7.3%; 6.8%; and 7%. The Borough’s

appraiser’s second report (for tax years 2018-2020) included Cap rates from CoStar for “all

industrial” properties for the first quarter (Q1) of 2013-2020 for three regions as follows: (A)

Northern New Jersey Metro (7.41%; 7.11%; 6.76%; 6.46%; 6.23%; 6.11%; 6.03%; 6.03%); (B)

Brunswick/Piscataway Cluster (7.04%; 6.81%; 6.46%; 6.12%; 5.83%; 5.68%; 5.62%; 5.62%);

and (C) Carteret/Avenel Submarket (6.88%; 6.65%; 6.29%; 5.95%; 5.69%; 5.58%; 5.62%;

5.62%). However, there was no demarcation of property class. While the Borough’s appraiser’s

report included a list of 29 “Warehouse/Distribution Comparable Properties” in the Borough,

there were no Cap rate data nor the years to which the rental information data pertained. None

of the data also provided specific Cap rates for billboard leased portions of real estate.

Since both appraisers deemed the Subject to be a second-tier industrial property, it is

logical to apply the Cap rates pertaining to such properties, and here, with the RERC data. While

the location is a plus for the Subject, the lease provisions for the billboard on the Subject should

also be considered: that the contract could be terminated or rent reduced if the tenant is unable

to use the billboard for advertising (to either $100 annually, or to 50% if only one side is used

for advertising). Thus, the court finds that an appropriate Cap rate is 7.5% for tax years 2014-

2017 and 7% for tax years 2018-2020. These rates also comport with plaintiff’s appraiser’s

concluded Cap rates for the Subject (but without the additional risk under the lease terms as

11
Plaintiff’s appraiser agreed that the Subject while in average condition, would likely fit in more as
a second-tier industrial property due to its location. Per RERC, second-tier investment properties
are “aging, former first tier properties, in good to average locations.” Going-in Cap rate is defined
as “the overall [Cap] rate found by dividing a property’s net operating income for the first year after
purchase by the present value of the property.” The Appraisal of Real Estate, 517.
21
noted above) which were at 7.3% (tax years 2014-2016); 7.2% (tax year 2017); 7% (tax year

2018) and 6.9% (tax years 2019-2020). The 7.5% and 7% Cap rates provide a value of $372,480

(tax years 2014-2017) and $390,770 (tax years 2018-2020) using the EGI as computed by the

Borough’s appraiser ($27,936 tax years 2014-2017 and $27,354 for tax years 2018-2020).

With the above findings, the court finds the value of the Subject as follows:

Tax Year 2014 (adjustments in italics)
Subject Sale 112 Sale 2 Sale 3 Sale 4
100 Minue St 902 E. Hazelwood 7 Parkway Pl 1100 Milik St 450 Florida Grove
Address
Carteret Rahway Edison Carteret Perth Amboy
Sale Price N/A $2,200,000 $3,780,500 $3,650,000 $2,650,000
Sale Date N/A 04/10/2013 09/26/2011 03/18/2010 9/18/2009
GBA 28,800 SF 29,996 SF 50,400 SF 49,776 SF 39,141 SF
PSF GBA $73.34 $75.01 $73.33 $67.70
Market Adj. +5% +5% +5%
Adj. Price (AP) $73.34 $78.76 $76.99 $71.09
Lot Size 5 acres 1.38 acres 2.42 acres 4.41 acres 2.7 acres
3 truck doors; 1
4 indoor docks 7 truck doors 8 truck doors, 2
Doors/Bays 21 bays bay
(+5% of AP) (+5% of AP) bays (+5% of AP)
(+5% of AP)
5% (-5% of
Office Space 11% 15% 15% 15%
AP)
Renovated Good
Condition/Age Average Average Average
(-5% of AP) (-5% of AP)
Final Adj Price $77.00 $75.42 $76.99 $74.64

Placing most weight to the Sale 1, its sale date being closest to the assessment date and its

building size similar to the Subject; least weight to Sales 4 it being farthest from the assessment

date; and more weight to Sale 3 it being in the Borough than Sale 2 which had a very motivated

buyer, the court finds $76 PSF of GBA as reasonable, which provides a value of $2,188,800

(28,800 SF x $76 PSF). This plus $372,480 for the billboard provides the Subject’s value as

$2,561,280. The assessed-to-true value is 101% ($2,594,100 ÷ $2,561,800). The average ratio

was 97.86% with the lower limit at 83.18% and upper limit at 112.5%. The assessed-to-true

12
The sale was marked NU3 (sale between a corporation and its shareholder). The Borough’s
appraiser testified that he would deem it usable since the broker for the sale confirmed its arms-
length nature.
22
value ratio exceeds the upper limit therefore, application of the average ratio is required, which

reduces the assessment to $2,506,470 (rounded).

Tax Year 2015 (adjustments in italics)
Subject Sale 1 Sale 2 Sale 3 Sale 4
100 Minue St 7 Olsen Ave 902 E. Hazelwood 7 Parkway Pl 1100 Milik St
Address
Carteret Edison Rahway Edison Carteret
Sale Price N/A $1,350,000 $2,200,000 $3,780,500 $3,650,000
Sale Date N/A 05/29/2014 04/10/2013 09/26/2011 03/18/2010
GBA 28,800 SF 15,000 SF 29,996 SF 50,400 SF 49,776 SF
PSF GBA $90 $73.34 $75.01 $73.33
Market Adj. +5% +5%
Adj. Price (AP) $90 $73.34 $78.76 $76.99
Lot Size 5 acres 2.11 acres 1.38 acres 2.42 acres 4.41 acres
3 truck doors; 1 4 indoor
2 bays (+5% 7 truck doors
Doors/Bays 21 bays bay docks
of AP) (+5% of AP)
(+5% of AP) (+5% of AP)
5% (-5% of
Office Space 11% 12% 15% 15%
AP)
Renovated Good (-5% of
Condition/Age Average Average
(-5% of AP) AP)
Final Adj Price $94.50 $77.00 $75.01 $76.99

Placing equal weight to Sales 1 and 2 (closer to the assessment date), then to Sale 4 and last to

Sale 3 (for the same reasons stated above since both were also used as comparables for tax year

2014), the court finds the reasonable PSF of GBA to be $85. This provides a value of $2,448,000

(28,800 SF x $85 PSF). This plus $372,480 for the billboard provides the Subject’s value as

$2,820,480. The assessed-to-true value is 91.97% ($2,594,100 ÷$2,820,480). The average ratio

was 86.76% with the lower limit at 73.75% and upper limit at 99.77%. The assessed-to-true

value ratio falls within the corridor therefore, the assessment is affirmed.

Tax Year 2016 (adjustments in italics)13
Subject Sale 1 Sale 3 Sale 4
100 Minue St 6 Connerty Ct 7 Olsen Ave 902 E. Hazelwood
Address
Carteret E. Brunswick Edison Rahway
Sale Price N/A $1,450,000 $1,350,000 $2,200,000
Sale Date N/A 09/29/2015 05/29/2014 04/10/2013
GBA 28,800 SF 12,650 SF 15,000 SF 29,996 SF
PSF GBA $114.62 $90 $73.74
Market Adj. +5% of AP +5% of AP
Adj. Price (AP) $114.62 $94.50 $77.01

13
The court rejected comparable 2, the sale at 3001 S. Clinton Avenue, as it involved multiple lots.
23
Lot Size 5 acres 2.04 acres 2.11 acres 1.38 acres
3 truck doors; 1
16 loading docks; 2 bays (+5% of
Doors/Bays 21 bays bay
5 bays AP)
(+5% of AP)
Office Space 11% 8% 12% 15%
Final Adj Price $114.62 $99.23 $77.43

Placing equal weight to the three sales (although Sale three has a more comparable GBA to the

Subject, its assessment date is farther than Sales 1 and 2), the court finds $95 PSF of GBA as

reasonable. This provides a value of $2,736,000 (28,800 SF x $95 PSF), which plus the

billboard’s valuation of $372,480 provides a total value of $3,108,480. The assessed-to-true

value is 83.45% ($2,594,100 ÷ $3,108,480). The average ratio was 88.36% with the lower limit

at 75.11% and upper limit at 101.61%. The assessed-to-true value ratio falls within the corridor

therefore, the assessment is affirmed.

Tax Year 2017 (adjustments in italics)14
Subject Sale 2 Sale 3 Sale 4
100 Minue St 3614 Kennedy Rd 11 Terminal Rd 6 Connerty Ct
Address
Carteret S. Plainfield New Brunswick E. Brunswick
Sale Price N/A $1,485,000 $1,800,000 $1,450,000
Sale Date N/A 05/10/2016 04/22/2016 09/29/2015
GBA 28,800 SF 15,435 SF 19,500 SF 12,650 SF
PSF GBA $96.21 $92.31 $114.62
Market Adj.
Adj. Price (AP) $96.21 $92.31 $114.62
Lot Size 5 acres 1.15 acres 2.14 acres 2.04 acres
1 truck door; 2 4 loading docks 16 loading docks;
Doors/Bays 21 bays
bays (+5% of AP) (+5% of AP) 5 bays
Office Space 11% 20% (-5% of AP) 10% 8%
Final Adj Price $96.21 $99.23 $114.62

Placing equal weight to the three sales, the court finds that $100 PSF of GBA is reasonable. This

provides a value of $2,880,000 (28,800 SF x $100 PSF), which plus the billboard’s valuation of

$372,480 provides a total value of $3,252,480. The assessed-to-true value is 90.2% ($2,933,800

÷ $3,252,480). Tax year 2017 was a district-wide reassessment year, therefore Chapter 123 does

not apply, and an assessment cannot be increased unless a timely counterclaim was filed. See

14
The court rejected comparable 1, the sale at 7 Progress Street, since it involved multiple lots.
24
Elrabie v. Borough of Franklin Lakes, 24 N.J. Tax 158 (Tax 2008). Since the Borough’s

counterclaim for tax year 2017 was withdrawn as untimely filed (and the court issued a judgment

in this regard), the assessment is affirmed.

Tax Year 2018 (adjustments in italics)15
Subject Sale 216 Sale 3 Sale 4
100 Minue St 15-19 Evans 3614 Kennedy Rd 11 Terminal Rd
Address
Carteret Terminal, Hillside S. Plainfield New Brunswick
Sale Price N/A $3,500,000 $1,485,000 $1,800,000
Sale Date N/A 05/18/2017 05/10/2016 04/22/2016
GBA 28,800 SF 32,189 SF 15,435 SF 19,500 SF
PSF GBA $108.73 $96.21 $92.31
Market Adj. +1% +4% +4%
Adj. Price (AP) $109.82 $100.06 $96
Lot Size 5 acres 1.21 acres 1.15 acres 2.14 acres
1 truck door; 2 4 loading docks
Doors/Bays 21 bays
bays (+5% of AP) (+5% of AP)
Office Space 11% 12% 20% (-5% of AP) 10%
Condition/Age Average (-5% of AP)17
Final Adj Price $104.32 $100.06 $100.08

Placing equal weight to the three sales, the court finds that $100 PSF of GBA is reasonable. This

provides a value of $2,880,000 (28,800 SF x $100 PSF), which plus the billboard’s valuation of

$390,770 provides a total value of $3,270,770. The assessed-to-true value is 89.69%

($2,933,800 ÷ $3,270,770). The average ratio was 107.37% (i.e., 100%) with the lower limit at

91.26% and upper limit at 123.48%. The assessed-to-true value ratio falls below the lower limit,

therefore the court therefore applies the average ratio, which is 100%, therefore, the assessment

is increased to $3,270,770. See N.J.S.A. 54:51A-6(c) (“If both the average ratio and the ratio of

the assessed value of the subject property to its true value exceed the county percentage level,

15
The court rejected comparable 1, the sale at 333 Cantor Avenue, as a leased fee sale.
16
The sale was marked NU26 because the seller was an exempt entity. Nothing was provided to
show that the status of the seller renders the sale an unreliable indicator of value.
17
The appraiser testified that this adjustment was for the age of the building.
25
the tax court shall enter judgment revising the taxable value of the property by applying the

county percentage level to the true value of the property”).18

Tax Year 2019 (adjustments in italics)19
Subject Sale 1 Sale 2 Sale 4
100 Minue St 470 W. 1st Avenue 10 Production 15-19 Evans
Address
Carteret Roselle Way, Avenel Terminal, Hillside
Sale Price N/A $3,320,000 $6,325,000 $3,500,000
Sale Date N/A 10/10/2018 11/29/2017 05/18/2017
GBA 28,800 SF 32,293 SF 54,866 SF 32,189 SF
PSF GBA $102.81 $115.28 $108.73
Market Adj. +3% +3%
Adj. Price (AP) $102.81 $118.74 $113.08
Lot Size 5 acres 1.38 acres 3.14 acres 1.21 acres
6 bay doors (+5%
Doors/Bays 21 bays
of AP)
Office Space 11% 6% 12%
Condition/Age Average Average Average (-5% of AP)
Final Adj Price $107.95 $118.74 $107.43

Placing equal weight to the three sales, the court finds that $110 PSF of GBA is reasonable. This

provides a value of $3,168,000 (28,800 SF x $110 PSF), which plus the billboard’s valuation of

$390,770 provides a total value of $3,558,770. The assessed-to-true value is 95.64%

($3,403,800 ÷ $3,558,770). The average ratio was 96.27% with the lower limit at 81.86% and

upper limit at 110%. The assessed-to-true value ratio falls within the corridor, thus the

assessment is affirmed.

Tax Year 2020 (adjustments in italics)20
Subject Sale 2 Sale 4
100 Minue St 27 Englehard Ave 470 W. 1st Avenue
Address
Carteret Woodbridge Roselle
Sale Price N/A $3,700,000 $3,320,000
Sale Date N/A 05/28/2019 10/10/2018
GBA 28,800 SF 25,351 SF 32,293 SF
PSF GBA $145.95 $102.81
Market Adj. +1% +3%

18
See Division of Taxation, Handbook for New Jersey Assessors, 684-85 (Oct. 2018) (at example 3,
where the average ratio is 110.41%, the lower limit is 93.85%, the upper limit is 126.97%, the
assessment is $120,000, the true value is found at $100,000, thus, the assessed-to-true value ratio is
110%, the court must apply the average ratio, i.e., 100% and conclude the value as $100,000).
19
The court rejected comparable 3, the sale at 333 Cantor Avenue, as it was a leased fee sale.
20
The court rejected comparable 1, the sale at 330 Dalziel Road, as it was a leased fee sale. It rejected
comparable 3, 50 Ingham Avenue, since it involved multiple lots.
26
Adj. Price (AP) $147.41 $105.89
Lot Size 5 acres 4.8 acres 1.38 acres
6 doors; 1 drive-in 6 bay doors (+5% of
Doors/Bays 21 bays
door (+5% of AP) AP)
Office Space 11% 10% 6%
Final Adj Price $154.78 $111.18

Placing equal weight to each sale, the court finds $125 PSF of GBA is reasonable. This provides

a value of $3,600,000 (28,800 SF x $125 PSF), which plus the billboard’s valuation of $390,770

provides a total value of $3,990,770. The assessed-to-true value is 85.29% ($3,403,800 ÷

$3,990,770). The average ratio was 87.72% with the lower limit at 75.56% and upper limit at

100.8%. The assessed-to-true value ratio falls within the corridor therefore the assessment is

affirmed.

CONCLUSION

The court finds the Subject’s value for each tax year after application of the Chapter 123

ratio (except for tax year 2017) as follows: $2,506,470; $2,594,100; $2,594,100; $2,933,800;

$3,270,770; $3,403,800; and $3,403,800. Judgements will be entered in accordance with this

opinion.

Very Truly Yours,
~
3, ,
Mala Sundar, P.J.T.C.

27