Liberty Street Apartments LLC v. Little Ferry Borough (opinion following trial)

TAX COURT OF NEW JERSEY
JOSHUA D. NOVIN 	Dr. Martin Luther King, Jr. Justice Building
Judge 	495 Dr. Martin Luther King, Jr. Blvd., 4 th Floor
Newark, New Jersey 07102
Tel: (609) 815-2922, Ext. 54680
NOT FOR PUBLICATION WITHOUT THE APPROVAL
OF THE TAX COURT COMMITTEE ON OPINIONS
July 2, 2026
Michael I. Schneck, Esq.
Schneck Law Group LLC
23 Vreeland Road, Suite 270
Florham Park, New Jersey 07932
William R. Betesh, Esq.
Boggia, Boggia & Betesh, LLC
71 Mt. Vernon Street
Ridgefield Park, New Jersey 07660
Re: 	Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Dear Mr. Schneck and Mr. Betesh:
This letter shall constitute the court’s opinion following trial of the 2023, 2024, and 2025
local property tax appeals instituted by plaintiff, Liberty Street Apartments LLC (“Liberty Street”).
Liberty Street is the owner of the real property and improvements located at 406-444
Liberty Street, Little Ferry Borough, Bergen County, New Jersey (the “subject property”). The
subject property is identified on the municipal tax map of Little Ferry Borough (“Little Ferry”), as
block 6.01, lot 1.
At the commencement of trial, Liberty Street and Little Ferry stipulated to the following
matters: (i) the qualifications of each proposed expert witness; (ii) the subject property’s highest
and best use; (iii) that the income capitalization approach is the most appropriate method to derive
a value for the subject property; and (iv) the subject property’s net operating income as of October
1, 2022, October 1, 2023, and October 1, 2024. Therefore, the sole issue remaining in dispute at
trial was the capitalization rates that should be applied to the subject property’s net operating

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -2-
income.1
For the reasons stated more fully below, the court will enter judgments: (i) affirming the
subject property’s 2023 and 2024 tax year assessments, and dismissing Liberty Street’s complaints
and Little Ferry’s counterclaims; and (ii) reducing the subject property’s 2025 tax year assessment.
I. 	Procedural History and Factual Findings
Pursuant to R. 1:7-4, the court makes the following findings of fact and conclusions of law
based on the evidence and testimony offered during trial.
The real property consists of a narrow rectangular-shaped parcel comprising 1.171-acres
or 51,008 square feet. 	The real property is improved with two brick two-story garden-style
apartment buildings, constructed in 1963, containing a total of forty-four (44) units and a surface
parking lot for approximately fifty-eight vehicles.2 	The buildings have a gross area of
approximately 29,698 square feet. Several apartment units were renovated approximately 10 years
1 	At conclusion of trial the court addressed a legal issue involving the equalization ratios that
should be applied for each tax year at issue under a “district-wide reassessment program.” The
court highlighted the inconsistencies between the trial testimony, the New Jersey Division of
Taxation’s published Tables of Equalized Valuations (Chapter 123 equalization ratios), and the
Final Equalization Tables for the County of Bergen for the 2023, 2024, and 2025 tax years; and
the lack of clarity between N.J.S.A. 54:51A-6 and N.J.S.A. 54:4-23. According to Little Ferry, a
100% equalization ratio should be applied to each year. 	However, the Division of Taxation’s
published Table of Equalized Valuations reflects that Little Ferry has an equalization ratio of: (i)
81.78%, as of 10/1/2022; (ii) 84.77%, as of 10/1/2023; and (iii) 86.84%, as of 10/1/2024.
Moreover, the County of Bergen’s published Final Equalization Tables reflect that: (i) a 94.30%
ratio is applied to Little Ferry for county expenses the 2023 tax year; (ii) a 96.83% ratio is applied
to Little Ferry for county expenses for the 2024 tax year; and (iii) a 95.95% ratio is applied to Little
Ferry for county expenses for the 2025 tax year. Following trial, the court conducted a series of
telephone conference calls with counsel on the record to address this issue. 	On June 30, 2026,
Liberty Street’s counsel and Little Ferry’s counsel stipulated that: (i) for the 2023 tax year a tax
rate of $2.74 and average equalization ratio of 92.60% should be applied; (ii) for the 2024 tax year
a tax rate of $2.50 and average equalization ratio of 94.61% should be applied; and (iii) for the
2025 tax year a tax rate of $2.44 and average equalization ratio of 94.69% should be applied.
2 Liberty Street’s expert opined that the subject property’s improvements were built in the 1950’s.

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -3-
ago, and several apartment units have undergone more recent renovations.
Liberty Street filed complaints challenging the subject property’s 2023, 2024, and 2025 tax
years assessments, and Little Ferry filed counterclaims challenging the subject property’s 2023,
2024, and 2025 tax year assessments.
During trial, Liberty Street and Little Ferry each offered testimony from New Jersey
certified general real estate appraisers, who were accepted by the court, without objection, as
experts in the real property valuation field (the “expert” or “experts”). 	The experts prepared
appraisal reports expressing their opinions of the subject property’s true or fair market value as of
the October 1, 2022, October 1, 2023, and October 1, 2024 valuation dates. The appraisal reports
contained numerous photographs of the subject property’s interior and exterior and were moved
into evidence.
As of each valuation date at issue, the subject property’s tax assessments, the stipulated
average equalization ratios, the subject property’s implied equalized value, and each expert’s value
conclusion are set forth below:
Valuation
date
Tax
assessment
Stipulated
average ratio
of assessed to
true value
Implied
equalized
value
Liberty
Street’s expert
Little Ferry’s
expert
10/1/2022 	$4,796,200 	92.60% 	$5,179,482 	$4,500,000 	$5,519,900
10/1/2023 	$4,970,500 	94.61% 	$5,253,673 	$4,490,000 	$5,960,000
10/1/2024 	$5,653,100 	94.69% 	$5,970,113 	$4,800,000 	$5,695,400
The testimony elicited during trial, along with the appraisers’ photographs, depict well-
maintained garden apartment buildings. 	The photographs of the representative apartment units
disclose attractive vinyl composite flooring in the kitchen, hardwood flooring in the dining/living
areas and bedrooms. The kitchens are nicely appointed with upper and lower painted shaker-style
cabinetry, stainless steel appliances, and Formica style countertops. 	The kitchens are equipped

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -4-
with a stainless-steel sink, combination range/oven, microwave oven, and a refrigerator.3 	The
bathrooms feature ceramic wall and floor tiling, a toilet, a vanity with sink, a wall-mounted
mirrored medicine cabinet, and a bathtub/shower. The interior walls and ceilings are finished with
painted sheetrock/plaster. Heat is provided by hot water baseboard with natural gas fired boilers.
Each apartment unit is supplied with one window air conditioning unit. In addition, the building’s
basement contains a laundry room with three washing machines and clothes dryers.
The subject property is located along Liberty Street between its intersection with West Gate
Street and Backiel Street, near U.S. Route 46, in Little Ferry’s R-M Multifamily Zoning District.
The use of the subject property as a multi-family garden-style apartment complex is considered a
legal, non-conforming use.
II. 	Conclusions of Law
A. 	Presumption of Validity
“Original assessments and judgments of county boards of taxation are entitled to a
presumption of validity.” 	MSGW Real Estate Fund, LLC v. Mountain Lakes Borough, 18 N.J.
Tax 364, 373 (Tax 1998). “Based on this presumption, the appealing taxpayer has the burden of
proving that the assessment is erroneous.” Pantasote Co. v. Passaic Cty., 100 N.J. 408, 413 (1985).
“The presumption of correctness . . . stands, until sufficient competent evidence to the contrary is
adduced.” Little Egg Harbor Twp. v. Bonsangue, 316 N.J. Super. 271, 285-86 (App. Div. 1998).
A taxpayer can only rebut the presumption by introducing “cogent evidence” of true value.
Pantasote Co., 100 N.J. at 413. 	That is, evidence “definite, positive and certain in quality and
quantity to overcome the presumption.” Aetna Life Ins. Co. v. Newark City, 10 N.J. 99, 105
3 The appliances are furnished by Liberty Street.

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -5-
(1952). Thus, at the close of the plaintiff’s proofs, the court must be presented with evidence that
raises a “debatable question as to the validity of the assessment.” MSGW Real Estate Fund, LLC,
18 N.J. Tax at 376.
In evaluating whether the evidence presented meets the “cogent evidence” standard, the
court “must accept such evidence as true and accord the plaintiff all legitimate inferences which
can be deduced from the evidence.” Id. at 376 (citing Brill v. Guardian Life Ins. Co. of Am., 142
N.J. 520 (1995)). 	The evidence presented, when viewed under the Brill standard “must be
‘sufficient to determine the value of the property under appeal, thereby establishing the existence
of a debatable question as to the correctness of the assessment.’” West Colonial Enters, LLC v.
East Orange City, 20 N.J. Tax 576, 579 (Tax 2003) (quoting Lenal Properties, Inc. v. City of Jersey
City, 18 N.J. Tax 405, 408 (Tax 1999), aff’d, 18 N.J. Tax 658 (App. Div. 2000)). “Only after the
presumption is overcome with sufficient evidence . . . must the court ‘appraise the testimony, make
a determination of true value and fix the assessment.’” Greenblatt v. Englewood City, 26 N.J. Tax
41, 52 (Tax 2011) (quoting Rodwood Gardens, Inc. v. Summit City, 188 N.J. Super. 34, 38-39
(App. Div. 1982)).
Hence, even in the absence of a motion to dismiss under R. 4:37-2(b), the court is
nonetheless required to determine if the party challenging the tax assessment has overcome the
presumption of validity. If the court concludes that the challenging party has not carried its burden,
dismissal of the action is warranted under R. 4:40-1, and the trial court need not engage in an
evaluation of the evidence to make an independent determination of value.
Here, affording Liberty Street all reasonable inferences that could be deduced from the
evidence presented, the court finds that it produced cogent evidence sufficient to overcome the
presumption of validity. Liberty Street’s expert’s opinions, if accepted by the court as true, raise

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -6-
debatable questions as to the validity of the subject property’s 2023, 2024, and 2025 tax year
assessments.
B. 	Highest and Best Use
Liberty Street and Little Ferry stipulated to the subject property’s highest and best use, as
vacant, and as improved. As vacant, for development as a multi-family apartment building, and
as improved, for continuation of its present use as a multi-family apartment building. Based on
the evidence elicited during trial, the court finds such stipulation to be credible.
C. 	Valuation
Liberty Street and Little Ferry stipulated that the income capitalization approach is the most
appropriate method to derive an estimate of the subject property’s true or fair market value. Based
on the evidence elicited during trial, the court finds such stipulation to be credible.
Upon commencement of trial, Liberty Street and Little Ferry stipulated that, as of each
valuation date, the subject property’s Net Operating Income is:
October 1, 2022 	October 1, 2023 	October 1, 2024
$430,000 	$447,000 	$475,000
Thus, the sole remaining issue in dispute is the capitalization rates (base and loaded) that
must be applied to the subject property’s net operating income to discern the subject property’s
true or fair market value.
1. 	Capitalization
The direct capitalization technique is used “to convert an estimate of a single year’s income
expectancy into an indication of value in one direct step, either by dividing the net income estimate
by an appropriate capitalization rate or by multiplying the income estimate by an appropriate
factor.” Appraisal Institute, The Appraisal of Real Estate 491 (14th ed 2013); Prudential Ins. Co.

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -7-
of Am. v. Parsippany-Troy Hills Twp., 16 N.J. Tax 58, 60 (Tax 1995), aff’d, 16 N.J. Tax 148 (App.
Div. 1996); Hull Junction Holding Corp. v. Princeton Borough, 16 N.J. Tax 68, 80-81 (Tax 1996).
Thus, the capitalization rate is the device that converts a property’s net operating income into an
estimate of market value.
Here, in deriving their capitalization rates, Liberty Street’s expert and Little Ferry’s expert
employed the band of investment technique and reviewed published investor survey data.4 The
band of investment technique “is a form of ‘direct capitalization’ which is used ‘to convert a single
year’s income estimate into a value indication.’ The technique includes both a mortgage and an
equity component.” 	Hull Junction Holding Corp., 16 N.J. Tax at 80-81 (quoting Appraisal
Institute, The Appraisal of Real Estate, 467 (10 th ed 1992)).
To perform his band of investment technique Liberty Street’s expert reviewed the
American Council of Life Insurers Investment Bulletins (“ACLI”) and engaged in discussions with
a local bank’s lending officer to derive his mortgage interest rates, loan amortization terms, and
loan-to-value ratios.5 To discern his equity dividend rates, Liberty Street’s expert reviewed: (i)
Real Estate Research Corporation’s (“RERC”) East Investment Criteria for Second-Tier and
Third-Tier Investment Properties for apartments for the 3rd quarter 2022, 3 rd quarter 2023, and 3 rd
quarter 2024: (ii) ACLI tables for the 3rd quarter 2022, 3 rd quarter 2023, and 3 rd quarter 2024; and
(iii) PwC Real Estate Investor Surveys (“PwC Surveys”), Mid-Atlantic Region, for the 3rd quarter
4 “[T]he Tax Court has accepted, and the Supreme Court has sanctioned, the use of data collected
and published by the American Council of Life Insurance.” Hull Junction Holding Corp., 16 N.J.
Tax at 82-83. In addition, “[r]elevant data is also collected and published by . . . [PwC] Real Estate
Investor Survey.” Id. at 83. By scrutinizing and “analyzing this data in toto, the court can make a
reasoned determination as to the accuracy and reliability of the mortgage interest rates, mortgage
constants, loan-to-value ratios, and equity dividend rates used by the appraisers.” Ibid.
5 Liberty Street’s expert did not produce copies of the ACLI tables, rather, he created tables with
data fields that he apparently extracted from the ACLI tables.

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -8-
2022, 3rd quarter 2023, and 3rd quarter 2024.6
Similarly, in performing the band of investment technique Little Ferry’s expert reviewed:
(i) the ACLI tables for the 3rd quarter 2022, 3rd quarter 2023, and 3rd quarter 2024; (ii) the PwC
Surveys for the 3rd quarter 2022, 3rd quarter 2023, and 3rd quarter 2024; and (iii) a CoStar’s
Hackensack/Teaneck Multi-Family Submarket report, providing multi-family sales data from
2015 to 2025, to derive his mortgage interest rates, loan amortization terms, loan-to-value ratios,
and equity dividend rates.
The following charts detail the components of the experts’ band of investment analysis and
their derived band of investment base capitalization rates as of each valuation date:
October 1, 2022 valuation date
Interest
rate
Loan-to-
value ratio
Amortization
period
Equity
dividend rate
Base
capitalization rate
Liberty
Street’s expert
4.75% 	60% 	25 years 	6.75% 	6.80%7
Little Ferry’s
expert
4.50% 	60% 	30 years 	3.50% 	5.05%8
October 1, 2023 valuation date
Interest
rate
Loan-to-
value ratio
Amortization
period
Equity
dividend rate
Base
capitalization rate
Liberty
Street’s expert
6.00% 	60% 	25 years 	7.00% 	7.45%9
Little Ferry’s
expert
5.50% 	50% 	35 years 	3.50% 	5.00%10
6 The PwC Surveys for the 3rd quarter 2024 were not included in the appraisal report.
7 60% LTV x 6.84% constant = 4.104%; 40% x 6.75% = 2.70%; 4.104% + 2.70% = 6.804%.
8 60% LTV x 6.08% constant = 3.65%; 40% x 3.50% = 1.40%; 3.65% + 1.40% = 5.05%.
9 60% LTV x 7.73% constant = 4.638%; 40% x 7.00% = 2.80%; 4.638% + 2.80% = 7.438%.
10 50% LTV x 6.44% constant = 3.22%; 50% x 3.50% = 1.75%; 3.22% + 1.75% = 4.97%.

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -9-
October 1, 2024 valuation date
Interest
rate
Loan-to-
value ratio
Amortization
period
Equity
dividend rate
Base
capitalization rate
Liberty
Street’s expert
6.00% 	60% 	25 years 	7.00% 	7.45%11
Little Ferry’s
expert
6.00% 	60% 	35 years 	4.50% 	5.90%12
Thus, after engaging in the band of investment technique and reviewing and analyzing the
data, Liberty Street’s expert concluded a base capitalization rate of: (i) 6.80%, as of the October
1, 2022 valuation date; (ii) 7.45%, as of the October 1, 2023 valuation date; and (iii) 7.45%, as of
the October 1, 2023 valuation date. 	In contrast, Little Ferry’s expert concluded a base
capitalization rate of: (i) 5.05%, as of the October 1, 2022 valuation date; (ii) 5.00%, as of the
October 1, 2023 valuation date; and (iii) 5.90%, as of the October 1, 2023 valuation date.
2. 	Court Analysis
At the outset, the court emphasizes that the RERC and PwC Survey data reflects a forecast
of regional and institutional investors required or expected equity return on a 100% cash
transaction.13 	Stated 	differently, 	“[t]he 	RERC and 	[PwC] 	Korpacz 	data 	is 	based 	upon
all cash transactions.” Hull Junction Holding Corp., 16 N.J. Tax at 102. However, the band of
investment technique employs both a mortgage financing component, and a cash equity investment
component. 	Thus, as keenly observed by Judge Kuskin, “[w]here the cash investment, i.e., the
equity investment, is only 25%-30% of the total investment, the equity dividend rate would tend
to be lower than the all[-]cash rate.” Ibid. Accordingly, the court finds that the equity dividend
and capitalization rates reflected in the RERC and PwC Survey investor data are not necessarily
11 60% LTV x 7.73% constant = 4.638%; 40% x 7.00% = 2.80%; 4.638% + 2.80% = 7.438%.
12 60% LTV x 6.84% constant = 4.104%; 40% x 4.50% = 1.80%; 4.104% + 1.80% = 5.904%.
13 https://rerc.com/img/sample-realestate.pdf.

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -10-
an accurate gauge of the equity dividend and capitalization rates that would be employed in a
transaction that involves between 50% to 60% mortgage financing, as proposed by the experts in
these matters.
Additionally, the court highlights that RERC defines net operating income as the “current
income of a property net of all operating expenses, but before any reserves, debt service, capital
expenditures, tenant improvements and leasing commissions” (emphasis added).14 	Thus, in
calculating the capitalization rates reported in the RERC surveys, a property’s annual real estate
taxes have been deducted from its gross income. However, it is a well-settled principle of New
Jersey local property tax valuation that “[i]nclusion of real estate taxes as an operating expense is
not permitted because the amount of real estate taxes are ultimately determined as a result of this
court’s finding of value . . . .” Spiegel v. Town of Harrison, 18 N.J. Tax 416, 427 (Tax 1999). In
sum, the capitalization rates proffered by RERC are not an entirely accurate representation of
capitalization rates that would be employed in local property tax matters before the New Jersey
Tax Court.
Finally, the court underscores that the RERC and PwC Survey data reflects hypothetical
leased fee valuations, a method of valuation not accepted by the Tax Court in local property
matters.15 	Thus, the data extracted from a hypothetical leased fee valuation of property is not
14 https://rerc.com/img/sample-realestate.pdf.
15 	A leased fee approach values the “ownership interest held by the lessor, which includes the
right to the contract rent specified in the lease plus the reversionary right when the lease expires.”
Appraisal Institute, The Appraisal of Real Estate 72 (14 th ed 2013). The leased fee approach is
materially influenced by the leasehold interest and the stream of rental income, it is often not a
reliable indicator of true or fair market value. A “leased fee. . . [valuation is] of dubious usefulness.
The remaining term of a lease, the creditworthiness of the tenants, the influence of atypical lease
clauses and stipulations, and other factors can affect the value . . . causing the sum to be less than
or greater than the value of the fee simple estate.” Id. at 505. Because a leased fee approach does

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -11-
necessarily probative of how the fee simple valuation would be arrived at, which this court is
charged with doing in these matters.
Therefore, for the foregoing reasons, the court places little weight on the RERC and PwC
Survey data in determining the base capitalization rates that should be applied to the subject
property’s reconstructed net operating income. Although the court recognizes that the RERC and
PwC Survey data are available marketplace data sources, the court does not find that they should
be the principal data sources for discerning the equity dividend and capitalization rates for the
subject property. 	As eloquently stated in The Appraisal of Real Estate, when developing a
capitalization rate, published surveys are an adequate source of “support rather than as primary
evidence of a capitalization rate.” The Appraisal of Real Estate 466 (14 th ed 2013).
Additionally, the court places little weight on the CoStar Hackensack/Teaneck Multi-
Family Submarket report. 	Although the CoStar report identifies the annual number of sale
transactions and the perceived quality of the apartment buildings sold, it offers little insight into
the size of the buildings sold, the composition of the apartment units, and financing terms, if any,
for these transactions. The report does not provide interest rates, loan-to-value ratios, amortization
terms, or loan types. 	Additionally, it offers no meaningful insight into how the reported
capitalization rates were derived, and whether these were all-cash transactions.
Rather, the court concludes that the ACLI tables provide the most meaningful data because
they are not polluted or impacted by questions of whether it involves all cash transactions, or how
not always represent the value of the fee simple interest, this court has rejected conclusions of
value premised upon the leased fee interest in property. Marina Dist. Development Co., LLC v.
City of Atlantic City, 27 N.J. Tax 469, 488 (Tax 2013), aff’d 28 N.J. Tax 568 (App. Div. 2015);
Pine Plaza Associates, L.L.C. v. Hanover Twp., 16 N.J. Tax 194, 199 (Tax 1996); Harclay House
v. East Orange City, 18 N.J. Tax 564 (Tax 2000); International Flavors & Fragrances, Inc. v. Union
Beach Borough, 21 N.J. Tax 403, 423 (Tax 2004).

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -12-
potential survey recipients perceived hypothetical transactional questions. Although not perfect,
the ACLI tables provide national data on actual financing transactions, identifying the number of
transactions in each category, the interest rates, loan types, loan amortization periods, and the
capitalization rates (thereby permitting the extraction of equity dividend rates), to enable the court
to discern a capitalization rate for the subject property under the band of investment technique.16
a. 	Loan-to-Value Ratios
The court highlights that both experts concluded that the loan-to-value ratios, as of the
October 1, 2022, and October 1, 2024 valuation dates, should be 60%. The court finds the experts’
conclusions are reasonable and supported by the data.17 Thus, the court accepts a 60% loan-to-
value ratio as of the October 1, 2022 and October 1, 2024 valuation dates.
In addition, the court’s review of the 3 rd quarter 2023 ACLI data reveals that under the
apartment building category: (i) all loan types, the average loan-to-value ratio was 56.74%; (ii)
fixed rate loans, the average loan-to-value ratio was 58.82%; (iii) floating rate loans, the average
loan-to-value ratio was 59.24%; (iv) in the Mid-Atlantic region, the average loan-to-value ratio
16 Although the court finds that ACLI provides meaningful data for gauging the accuracy of the
loan-to-value ratios, amortization terms, interest rates, and equity dividend rates employed by the
experts, the court readily acknowledges that the transactions summarized therein are generally,
institutional grade investments. 	The subject property is an aging garden style multi-family
apartment building of average quality and condition, and thus, may not be categorized as an
institutional grade investment. 	Therefore, the applicable the loan-to-value ratios, amortization
terms, interest rates, and equity dividend rates may be outside of the parameters of the ACLI data.
17 The court’s review of the ACLI Investment Bulletins reveals the following: (i) as of the October
1, 2022 valuation date, all types of apartment loans nationally bore a 57.58% loan-to-value ratio,
fixed rate apartment building loans bore a 58.70% loan-to-value ratio, and adjustable rate
apartment building loans bore a 56.76% loan-to-value ratio. 	Moreover, fixed rate apartment
building loans in the Mid-Atlantic region bore a loan-to-value ratio of 52.98%; and (ii) as of the
October 1, 2023 valuation date, all types of apartment loans nationally bore a 56.74% loan-to-
value ratio, fixed rate apartment building loans bore a 58.82% loan-to-value ratio, and adjustable
rate apartment building loans bore a 59.24% loan-to-value ratio. Moreover, fixed rate apartment
building loans in the Mid-Atlantic region bore a loan-to-value ratio of 54.50%.

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -13-
was 54.50%; and (v) all loan types, having less than 200 units, the average loan-to-value ratio was
57.91%. Therefore, the court finds Liberty Street’s expert’s testimony and conclusion to be more
credible, that, as of October 1, 2023, a 60% loan-to-value ratio should be applied. Accordingly,
the court accepts and will apply a 60% loan-to-value ratio as of the October 1, 2023 valuation date.
b. 	Amortization Term
According to Liberty Street’s expert, the survey participants that provide data under the
ACLI tables are obtaining preferrable loan amortization terms, that are atypical for a property like
the subject property. In his opinion, based on discussions with market participants, commercial
loans in the New Jersey marketplace for properties like the subject property are amortized on a 25-
year term. Thus, Liberty Street’s expert concluded a loan amortization term of 25 years should be
applicable to the subject property as of the October 1, 2022, October 1, 2023, and October 1, 2024
valuation dates.
According to Little Ferry’s expert, after reviewing the ACLI tables, he conferred with
market participants in the Bergen County market to confirm that the ACLI data was consistent
with and representative of the Bergen County market. Based on Little Ferry’s expert’s review of
the ACLI data and his discussions with Bergen County market participants, commercial loans are
generally amortized over a 30 to 35-year term. 	Thus, Little Ferry’s expert concluded a loan
amortization term of 30 years should be applicable to the subject property as of the October 1,
2022 valuation date, and a loan amortization term of 35 years should be applicable to the subject
property as of the October 1, 2023 and October 1, 2024 valuation dates.
The court’s review of the experts’ reproduced data from the 3rd quarter 2022, 3rd quarter
2023, and 3rd quarter 2024 ACLI tables reveal that under the apartment building category: (i) fixed
rate loans, the average amortization periods were 39, 42, and 40 years; (ii) fixed rate loans, between

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -14-
$2,000,000 to $4,999,000, the average amortization periods were 28, 30, and 28 years; (iii) fixed
rate loans, Mid-Atlantic region, the average amortization periods were 29, 35, and 33 years; and
(iv) all loan types, with having than 200 units, the average amortization periods were 32, 35, and
40 years.
Therefore, the court finds Little Ferry’s expert’s testimony and conclusion that a 30-year
amortization period, as of the October 1, 2022 valuation date, to be more credible and supported
by the market data.
However, the court must reject both Liberty Street’s expert’s and Little Ferry’s expert’s
amortization period conclusions for the October 1, 2023 and October 1, 2024 valuation dates. The
court places primary reliance on the ACLI table 8, fixed rate apartment loans having a loan amount
between $2,000,000 to $4,999,000. 	Given the experts’ valuation conclusions for the subject
property and a 60% loan-to-value ratio (as set forth above), a prospective purchaser of the subject
property would anticipate incurring a mortgage loan approximately between $2,700,000 to
$3,576,000 and a loan amortization period of between 28 to 30 years, as of October 1, 2023 and
October 1, 2024 valuation dates.
Therefore, the court finds that a 30-year amortization period is more accurate and supported
by the market data. 	Accordingly, the court will apply a 30-year amortization period as of the
October 1, 2023 and October 1, 2024 valuation dates.
c. 	Mortgage Interest Rates
The court highlights that both experts concluded that the mortgage interest rate, as of the
October 1, 2024 valuation date, should be 6.00%. 	The court finds the experts’ conclusions are

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -15-
reasonable and supported by the data.18 Thus, the court accepts a 6.00% mortgage interest rate, as
of the October 1, 2024 valuation date.
In addition, the court’s review of the 3 rd quarter 2022 ACLI data reveals that under the
apartment building category: (i) fixed rate loans, the average interest rate was 4.77%; (ii) fixed
rate loans, between $2,000,000 to $4,999,000, the average interest rate was 4.90%; (iii) fixed rate
loans, Mid-Atlantic region, the average interest rate was 4.58%; (iv) all loan types, with having
than 200 units, the average interest rate was 4.92%; and (v) all loan types, having a loan amount
of $50,001 - $75,000 per unit was 4.66%. Therefore, the court finds Liberty Street’s expert’s
testimony and conclusion to be more credible, that, as of October 1, 2022, a 4.75% mortgage
interest rate should be applied. Accordingly, the court accepts and will apply a 4.75% mortgage
interest rate as of the October 1, 2022 valuation date.
Finally, the court’s review of the 3rd quarter 2023 ACLI data reveals that under the
apartment building category: (i) fixed rate loans, the average interest rate was 5.91%; (ii) fixed
rate loans, between $2,000,000 to $4,999,000, the average interest rate was 6.24%; (iii) fixed rate
loans, Mid-Atlantic region, the average interest rate was 5.77 %; (iv) all loan types, with having
than 200 units, the average interest rate was 6.04%;19 and (v) all loan types, having a loan amount
of $50,001 - $75,000 per unit was 6.68%.20 Therefore, the court finds that, as of October 1, 2023,
18 The court’s review of the 3rd quarter 2024 ACLI data reveals that under the apartment building
category: (i) fixed rate loans, the average interest rate was 5.79%; (ii) fixed rate loans, between
$2,000,000 to $4,999,000, the average interest rate was 6.31%; (iii) fixed rate loans, Mid Atlantic
region, the average interest rate was 5.85%; and (iv) all loan types, with having than 200 units, the
average interest rate was 5.94%.
19 Little Ferry’s expert’s appraisal report incorrectly reported the interest rate for this category of
loan as 4.92%.
20 Little Ferry’s expert’s appraisal report incorrectly reported the interest rate for this category of
loan as 5.70%.

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -16-
Liberty Street’s expert’s 6% mortgage interest rate conclusion is more credible and should be
applied. Accordingly, the court will apply a 6% mortgage interest rate as of the October 1, 2023
valuation date.
d. 	Equity Dividend Rates
Liberty Street’s expert testified that he reviewed the RERC, PwC, and ACLI data in
deriving his equity dividend rates. However, according to Liberty’s Street’s expert, the ACLI and
PwC data do not contain information on non-institutional grade properties. 	Thus, according to
Liberty Street’s expert, “it’s really hard to compare equity rates from ACLI [and PwC] to a
property like this that’s not institutional.” In Liberty Street’s expert’s opinion, the subject property
“falls somewhere in that range” between RERC’s Second Tier Investment Properties and Third
Tier Investment Properties. Therefore, he primarily relied on the RERC data to discern his equity
dividend rates. In addition, Liberty Street’s expert expressed that, in determining equity dividend
rates, it is important to compare equity dividend rates to United States Treasury rates. 	In his
opinion, as United States Treasury rates rise and fall, so do equity dividend rates. In his opinion,
the United States Treasury rates would represent the “bottom” or floor for equity dividend rates.
Little Ferry’s expert testified that he relied on the extracted equity dividend rates from the
ACLI tables in arriving at his equity dividend rates. In Little Ferry’s expert’s opinion, the subject
property is “an investment-grade property . . . [and] it does qualify into a category for an
institutional investor.” 	Little Ferry’s expert highlighted the attributes that he felt would be
important to an institutional investor, including having stable tenancies, favorable location features
(close to mass transit and access to Manhattan), rent growth, and historically high asking rents.
Little Ferry’s expert testified that he also compared or performed a “check” of his concluded base
capitalization 	rates 	to the 	reported 	ACLI, 	PwC 	National 	Apartment 	Market 	and 	CoStar

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -17-
Hackensack/Teaneck Multi-Family Submarket capitalization rates. In addition, in Little Ferry’s
expert’s opinion there is no correlation between United States Treasury rates and equity dividend
rates.
The court’s own review of the 3rd quarter 2022 ACLI data reveals that under the apartment
building category: (i) fixed rate loans, the extracted average equity dividend rate was 2.72%; (ii)
fixed rate loans, between $2,000,000 to $4,999,000, the extracted average equity dividend rate was
4.17%; (iii) fixed rate loans, Mid-Atlantic region, the extracted average equity dividend rate was
3.72%;21 (iv) all loan types, having less than 200 units, the extracted average equity dividend rate
was 3.78%; and (v) all loan types, having a loan amount of between $50,001 - $75,000 per unit,
was 4.93%.
In addition, as of the October 1, 2022 valuation date, the United States Treasury rates
ranged from 3.79% (for a 30-year treasury bond) to 4.06% (for a 5-year treasury note). Moreover,
although the court affords it little weight, the RERC investor expected equity return on a 100%
cash transaction reported equity dividend rates ranging from 4.8% to 8.8% and averaging 6.4%,
for East Second Tier Apartments; and 5% to 9% and averaging 7.3%, for East Third Tier
Apartments.
The court’s review of the 3 rd quarter 2023 ACLI data reveals that under the apartment
building category: (i) fixed rate loans, the extracted average equity dividend rate was 3.63%; (ii)
fixed rate loans, between $2,000,000 to $4,999,000, the extracted average equity dividend rate was
3.75%; (iii) fixed rate loans, Mid-Atlantic region, the extracted average equity dividend rate was
2.44%; (iv) all loan types, having less than 200 units, the extracted average equity dividend rate
21 Little Ferry’s expert’s appraisal report incorrectly reported the extracted equity dividend rate
for this category was 2.31%.

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -18-
was 3.63%;22 (v) all loan types, having a loan amount of $50,001 - $75,000 per unit was 3.32%.23
In addition, as of the October 1, 2023 valuation date, the United States Treasury rates
ranged from 4.60% (for a 5-year treasury note) to 4.73% (for a 30-year treasury bond). Moreover,
although the court affords it little weight, the RERC investor expected equity return on a 100%
cash transaction reported equity dividend rates ranging from 6% to 9% and averaging 7.10%, for
East Second Tier Apartments; and 5.5% to 9.3% and averaging 7.7%, for East Third Tier
Apartments.
The court’s review of the 3 rd quarter 2024 ACLI data reveals that under the apartment
building category: (i) fixed rate loans, the extracted average equity dividend rate was 4.39%; (ii)
fixed rate loans, between $2,000,000 to $4,999,000, the extracted average equity dividend rate was
6.77%; (iii) fixed rate loans, Mid-Atlantic region, the extracted average equity dividend rate was
4.14%; (iv) all loan types, having less than 200 units, the extracted average equity dividend rate
was 5.33%; and (v) all loan types, having a loan amount of $50,001 - $75,000 per unit was
4.93%.24
In addition, as of the October 1, 2024 valuation date, the United States Treasury rates
ranged from 3.51% (for a 5-year treasury note) to 4.08% (for a 30-year treasury bond). Moreover,
although the court affords it little weight, the RERC investor expected equity return on a 100%
cash transaction reported equity dividend rates ranging from 5.5% to 9% and averaging 7%, for
East Second Tier Apartments; and 6% to 9.3% and averaging 7.8%, for East Third Tier
22 Little Ferry’s expert’s appraisal report incorrectly reported the extracted equity dividend rate
for this category was 3.78%.
23 Little Ferry’s expert’s appraisal report incorrectly reported the extracted equity dividend rate
for this category was 3.51%.
24 This data was reported by Little Ferry’s expert and produced in a chart in his appraisal report.

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -19-
Apartments.
Although the court recognizes that the subject property possesses a good location, access
to public transportation, is close to Manhattan, and has historically high asking rents, it nonetheless
is a small, aging garden-style multi-family dwelling in average condition with limited amenities.
For those reasons, the court finds that it does not comprise an institutional grade property but rather
is a good quality “investment-grade property,” as opined by Little Ferry’s expert.25 	The court
further agrees with Little Ferry’s expert that, in general, the ACLI tables provide the most
meaningful evidence of equity dividend rates. However, because the ACLI tables offer data and
information on institutional-grade properties, the court finds that the equity dividend rates for the
subject property would likely fall slightly above the upper limits of the ACLI data ranges.
Accordingly, based on the court’s review of the ACLI data, and in consideration of each
expert’s testimony, the court finds that: (i) as of the October 1, 2022 valuation date, a 4.875%
equity dividend rate is most credible and supported by the market evidence; (ii) as of the October
1, 2023 valuation date, a 4.375% equity dividend rate is most credible and supported by the market
evidence; and (iii) as of the October 1, 2024 valuation date, a 5.75% equity dividend rate is most
credible and supported by the market evidence.
e. 	Base Capitalization Rates
Having made findings regarding the most credible mortgage interest rates, loan-to-value
ratios, amortization periods, and equity dividend rates, the court concludes the following base
25 Institutional-grade property is defined as “real property investments that are sought out by
institutional buyers and have the capacity to meet generally prevalent institutional investment
criteria. These investments are typically characterized by the magnitude of the investment and
the size and quality of the property.” Dictionary of Real Estate Appraisal, at 102. Investment
property is defined as “property purchased for the primary purpose of earning a return on the
investment, in the form of rent, capital gain, or both.” Id. at 104.

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -20-
capitalization rates under the Band of Investment technique: (i) as of the October 1, 2022 valuation
date, a base capitalization rate of 5.71%;26 (ii) as of the October 1, 2023 valuation date, a base
capitalization rate of 6.07%;27 and (iii) as of the October 1, 2024 valuation date, a base
capitalization rate of 6.62%.28 The effective tax rates for Little Ferry are as follows: (i) 2.54%
(2.74% x stipulated 92.60% average ratio = 2.54%), as of October 1, 2022;29 (ii) 2.37% (2.50% x
stipulated 94.61% average ratio = 2.37%), as of October 1, 2023;30 and (iii) 2.31% (2.44% x
stipulated 94.69% average ratio = 2.31%), as of October 1, 2024.31
Therefore, after adding the effective tax rates, the loaded or overall capitalization rate is:
(i) 8.25% (5.71% + 2.54% = 8.25%), as of the October 1, 2022 valuation; (ii) 8.44% (6.07% +
2.37% = 8.44%), as of the October 1, 2023 valuation date; and (iii) 8.93% (6.62% + 2.31% =
8.93%), as of the October 1, 2024 valuation date.
Accordingly, the court finds the true or fair market value of the subject property to be: (i)
$5,212,000 ($430,000/8.25% = $5,212,121), as of the October 1, 2022 valuation date; (ii)
$5,296,000 ($447,000/8.44% = $5,296,208), as of the October 1, 2023 valuation date; and (iii)
$5,319,000 ($475,000/8.93% = $5,319,149), as of the October 1, 2024 valuation date.
3. 	Local Property Tax Assessment
Having reached conclusions of the subject property’s true or fair market value, the court
26 6.260% constant x 60% = 3.756% and 4.875% x 40% = 1.95% (3.756% + 1.95% = 5.706%).
27 7.195% constant x 60% = 4.317% and 4.375% x 40% = 1.75% (4.317% + 1.75% = 6.067%).
28 7.195% constant x 60% = 4.317% and 5.75% x 40% = 2.3% (4.317% + 2.3% = 6.617%).
29 The court notes that the Division of Taxation’s published 2023 General Tax Rates reflect that
Little Ferry has a General Tax Rate of 2.747% and Effective Tax Rate of 2.583%.
30 The court notes that the Division of Taxation’s published 2024 General Tax Rates reflect that
Little Ferry has a General Tax Rate of 2.505% and Effective Tax Rate of 2.419%.
31 The court notes that the Division of Taxation’s published 2025 General Tax Rates reflect that
Little Ferry has a General Tax Rate of 2.436% and Effective Tax Rate of 2.33%.

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -21-
turns its attention to determining if adjustments to the subject property’s 2023, 2024, and 2025 tax
year assessments are warranted.
Under N.J.S.A. 54:51A-6(a), commonly referred to as Chapter 123, when the court is
satisfied in a non-revaluation year by the evidence presented “that the ratio of the assessed
valuation of the subject property to its true value exceeds the upper limit or falls below the lower
limit of the common level range, it shall enter judgment revising the taxable value of the property
by applying the average ratio to the true value of the property. . . .” N.J.S.A. 54:51A-6(a). This
process involves application of the Chapter 123 common level range. N.J.S.A. 54:1-35a(b).
For the 2023 tax year, the subject property’s ratio of assessed value, $4,796,200, to true or
fair market value, $5,212,000 yields a ratio of 92.02% ($4,796,200/$5,212,000 = 92.02%), which
is consistent with the parties stipulated equalized ratio of 92.60%, and thus, is within the Chapter
123 common level range. Consequently, no adjustment in the 2023 local property tax assessment
is warranted. Liberty Street’s complaint and Little Ferry’s counterclaim for the 2023 tax year are
hereby dismissed.
For the 2024 tax year, the subject property’s ratio of assessed value, $4,970,500, to true or
fair market value, $5,296,000, yields a ratio of 93.85% ($4,970,500/$5,296,000 = 93.85%), which
is consistent with the parties stipulated equalized ratio of 94.61%, and thus, is within the Chapter
123 common level range. Consequently, no adjustment in the 2024 local property tax assessment
is warranted. Liberty Street’s complaint and Little Ferry’s counterclaim for the 2024 tax year are
hereby dismissed.
For the 2025 tax year, the subject property’s ratio of assessed value, $5,653,100, to true or
fair market value, $5,319,000, yields a ratio of 106.28% ($5,653,100/$5,319,000 = 106.28%),
which is outside of the Chapter 123 common level range. Consequently, the subject property’s

Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
Page -22-
tax assessment for the 2025 tax year should be:
$5,319,000 x .9469 	= 	$5,036,000 [ROUNDED]
Accordingly, a judgment establishing the local property tax assessment for the subject
property for the 2025 tax year will be entered as follows:
Land 	$ 	880,000
Improvement 	$4,156,000
Total 	$5,036,000
Accordingly, contemporaneous herewith the court shall enter judgment affirming the
subject property’s 2023 and 2024 tax years assessments and reducing the subject property’s 2025
tax year assessment.
Very truly yours,
/s/
Hon. Joshua D. Novin, J.T.C.