Elizabeth Grady Properties, Inc. v. Board of Assessors of the City of Medford (April 11, 2008)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


ELIZABETH GRADY 		 v. 		  BOARD OF ASSESSORS OF 
PROPERTIES, INC.		   	       THE CITY OF MEDFORD       

Docket Nos.: F273050                 Promulgated:
	  	   F273051 			  April 11, 2008

               
	These are appeals filed under the formal procedure pursuant to G.L. c. 58A, § 7 and G.L. c. 59, §§ 64 and 65 from the refusal of the Board of Assessors of the City of Medford, ("assessors" or "appellee") to abate taxes on two parcels of real estate located in the City of Medford, owned by and assessed to Elizabeth Grady Properties, Inc. ("Elizabeth Grady" or "appellant"), for fiscal year 2004.  
	Chairman Hammond heard these appeals. Commissioners Scharaffa, Egan, Rose and Mulhern joined him in the decisions for the appellee.  
	These findings of fact and report are made pursuant to a request by the appellant under G.L. c. 58A, § 13 and 831 CMR 1.32.  

Matthew A. Luz, Esq., for the appellant. 
	
James F. Sullivan, Esq., for the appellee.  




FINDINGS OF FACT AND REPORT
	On January 1, 2003, (the "relevant assessment date") the appellant was the assessed owner of two parcels of improved real estate located at 222 and 230 Boston Avenue in Medford (jointly the "subject properties.")  
For fiscal year 2004, the assessors valued 222 Boston Avenue at $1,779,700 and assessed a tax thereon, at the rate of $21.70 per thousand, in the amount of $38,619.49.  
For fiscal year 2004, the assessors valued 230 Boston Avenue at $843,100 and assessed a tax thereon, at the rate of $21.70 per thousand, in the amount of $18,295.27.  
On January 27, 2004, the assessors mailed the actual real estate tax bills for fiscal year 2004.  The appellant timely paid the tax due on the subject properties without incurring interest.  On February 26, 2004, the appellant filed its Applications for Abatement, which were deemed denied on May 26, 2004.  The appellant timely filed its Petitions with the Appellate Tax Board ("Board") on June 3, 2004.  Based on these facts, the Board found and ruled that it had jurisdiction to hear and decide these appeals.  
The parties introduced several exhibits into evidence, including jurisdictional documents, appraisal reports, photographs, deeds and property record cards, and also the testimony of one witness for each party.  Based on the evidence and testimony presented at the hearing, the Board found the following facts. 
222 Boston Avenue is a 28,433 square foot parcel of real estate improved with a 26,968 square foot, five-story, mill-style office building.  It has a steel frame, concrete foundation, and a flat roof covered by a rubber membrane.  Originally constructed in 1900, it was acquired by the appellant in 1997 for a purchase price of $550,000.  In 1998, the building underwent substantial renovations to accommodate its current use as a trade school.  At all material times, it was used primarily as a warehouse, office space and a trade school for training the cosmetic technicians associated with the Elizabeth Grady salons. The interior consists of classrooms, offices and storage areas.  222 Boston Avenue shares a common easement for parking with 230 Boston Avenue, and the two properties share a total of 52 parking spaces.  
222 Boston Avenue is located in a mixed-use area with easy access to Routes 16, 60 and I-93.  Other properties in the area include office and retail buildings as well as two-family residential properties.  At all material times, 222 Boston Avenue was 100% owner-occupied.
230 Boston Avenue is a 14,806 square foot parcel of real estate improved with a 9,705 square foot, two-story, partially-finished office building, constructed in 1998.  The interior was designed for use as office space, however, as of the relevant assessment date, it had not been completed and was being used primarily as storage space by the appellant.  Like 222 Boston Avenue, 230 Boston Avenue is located in a mixed-use area with easy access to Routes 16, 60 and I-93.  
The appellant's only witness was Mr. Eric Wolff, a certified appraiser.  Based on his education and experience, the Board qualified Mr. Wolff as an expert in the field of real estate valuation.  The appellee's only witness was Mr. Edward O'Neil, chief assessor for Medford.  
Mr. Wolff testified that he conducted an appraisal of the subject properties in July of 2006, at the request of the appellant.  As part of this appraisal, Mr. Wolff inspected both the interior and the exterior of the properties as well as the neighborhood.  The following discussion summarizes Mr. Wolff's analysis of each property:

			222 Boston Avenue
Mr. Wolff determined that 222 Boston Avenue's highest and best use was its primary use as an owner-occupied office building with the potential to subdivide the space for multiple tenants.  Mr. Wolff testified that due to the building's age, the cost approach was not an appropriate valuation method.  Instead, he applied the sales-comparison and income-capitalization approaches in his appraisal.  
In discussing his sales-comparison approach, Mr. Wolff referred to 200 Boston Avenue, a rehabilitated, formerly industrial, multi-story, multi-tenant building located immediately next door to 222 Boston Avenue.  Mr. Wolff testified at one point that 200 Boston Avenue was "the only building that has got any commonality to [222 Boston Avenue]." Mr. Wolff later testified that he was able to find only three properties that he felt had any comparability with 222 Boston Avenue: 33 Dartmouth Street in Malden; 119 Mystic Avenue in Medford; and 35 Highland Avenue in Malden.  Pertinent information regarding each property is summarized in the following table: 
   Address	  Sale Date	 Square Feet	 Sales Price	 $/Sq. Ft.	
33 Dartmouth Street, Malden	   9/3/02	   25,132	$1,000,000	   $39.80	
119 Mystic Avenue, Medford	  5/30/02	    6,072	  $575,000	   $94.70	
35 Highland Avenue, Malden	 10/23/01	    6,000	  $635,000	  $105.83	
Based on Mr. Wolff's analysis, the adjustments for those three properties relative to location, condition and building size ranged from 25% to 50%, leaving a range of $50 to $57 per square foot.  Utilizing the high end of that range, Mr. Wolff arrived at a value of $1,535,000, and then deducted estimated costs to complete the fourth floor of 222 Boston Avenue in the amount of $392,610, for a final value of $1,140,000.  However, Mr. Wolff ultimately concluded that none of these properties was truly comparable to 222 Boston Avenue, and therefore he relied on the income-capitalization approach to value the property.  
Because he felt that 222 Boston Avenue was best suited for occupancy by multiple tenants, and would most likely be of interest to an investor seeking a potential cash flow, Mr. Wolff opined that the income-capitalization approach was a more apt indicator of the building's value.  In applying the income-capitalization approach, Mr. Wolff identified seven comparable office rental properties for the purposes of analyzing 222 Boston Avenue's office space and four comparable industrial rental properties for the purposes of analyzing its industrial warehouse space.  Pertinent information about each of his identified comparable properties is summarized in the following tables: 
  Comparable Office Rents
  Address	  Tenant	Date/Length of Lease	Square Feet	$/Sq. Ft.	
278 Mystic Avenue, Medford	General Insulation	2002/
5 years	875	$18.00/SF-Gross plus electric	
39 Riverside Avenue, Medford	Confidential	2002/
5 years	1,200	$12.00/SF-NNN	
2-6 Furman Street, Medford	Confidential	2002/
5 years	1,000	$12.00/SF-NNN	
10 High Street, Medford	Various	2002/
5 years	600-4,500	$7.38/SF-$12.00/SF- Gross plus utilities	
200 Boston Avenue, Medford	Various	2002/
5 years	500-1,200	$16.95/SF-$19.95/SF- Gross plus electric	
452-660 High Street, Medford	Various	2002/
5 years	750-1,000	$10.00/SF-$12.00/SF- Gross plus electric	
464-474 High Street, Medford	Various	2002/
5 years	250-1,000	$16.00/SF-$19.00/SF- Gross plus electric	



               Comparable Industrial Rents

  Address	   Tenant	Date/Length of Lease	Square Feet	$/Sq. Ft.	
22 Blake Street, Medford	Confidential	2002/
3 years	22,400	$5.75/SF-NNN	
461 Riverside Avenue, Medford	Confidential	2002/
5 years	12,500	$7.95/SF-NNN	
121 Madison Street, Malden	Confidential	2002/
5 years	10,000	$6.50/SF-NNN	
130 Canal Street, Malden	Confidential	2002/
3 years 	20,000	$5.75/SF-NNN	


Unlike his sales-comparison approach, Mr. Wolff did include 200 Boston Avenue in his income-capitalization approach.  He testified that 200 Boston Avenue was probably the best indicator of the rental value for 222 Boston Avenue.  Mr. Wolff arrived at a rate of $14 per square foot for office space and $8 per square foot for warehouse space for 222 Boston Avenue based on the comparable office and industrial properties, although neither his appraisal report nor his testimony contained adjustment percentages or specific comparisons with any of the comparable properties.  He then assumed a 15% vacancy rate to arrive at a potential gross income of $340,880.  Mr. Wolff estimated expenses of $5.02 per square foot and total expenses of $129,051, with a resultant net operating income ("NOI") of $160,697.  Mr. Wolff determined that the appropriate capitalization rate was 9% plus a tax factor of 2.17%, for an overall rate of 11.17%.  His indicated value using the income-capitalization approach was $1,440,000.  He then subtracted costs in the amount of $392,610, attributable to renovating the fourth floor to make it suitable for rental.  Based upon these adjustments, Mr. Wolff determined the fair market value to be $1,050,000.  

			230 Boston Avenue
Mr. Wolff testified that while 230 Boston Avenue was used primarily as storage space by the appellant, its use as a warehouse was limited because of a lack of freight elevators and overhead doors. Mr. Wolff opined that its highest and best use was as an owner-occupied office building, though he added that extensive additional work would need to be completed on the building before it could be used for this purpose.   
Because the interior of the building was only partially completed, Mr. Wolff declined to apply the cost approach in his appraisal.  Rather, he applied the sales-comparison approach, using the same three properties that he had used in his sales-comparison analysis of 222 Boston Avenue.  His adjustments for condition, location and building size ranged from 5% to 60%, leaving a range of $64 to $90 per square foot.  Mr. Wolff then applied the high-end of that range, $90 per square foot, to the gross square footage of 9,705, arriving at a value of $873,450, which he rounded to $875,000.  From that amount, Mr. Wolff subtracted the estimated cost to complete the renovations necessary for the building to be used as office space, which he determined was $436,725, and rounded up to arrive at a final market value of $440,000.  
Mr. Wolff also applied the income-capitalization approach.  Using the same market information that he used in his income-capitalization analysis of 222 Boston Avenue, Mr. Wolff arrived at a rate of $18 per square foot.  Mr. Wolff believed that 222 Boston Avenue would command higher rents than 230 Boston Avenue because of its floor plan and the fact that it could be divided into multiple smaller office units.  Applying that rate to the gross square footage of the building, he arrived at a potential annual income of $174,690.  Mr. Wolff assumed a vacancy rate of 15% and came up with an effective gross income of $148,486.  He then assumed expenses of $5.45 per square foot, including a management fee, operating expenses, commissions and replacement reserves, to arrive at a total NOI of $95,517.  Again, Mr. Wolff determined a capitalization rate of 9% plus a tax factor of 2.17% for an overall rate of 11.17%. Capitalizing the NOI of $95,517 by his rate resulted in a final value of $855,000, from which Mr. Wolff deducted an estimated $436,735 necessary to renovate the building, and rounded up to arrive at a fair market value of $420,000.  
Because Mr. Wolff believed that the building was best suited to be used as owner-occupied office space, rather than rental to multiple tenants, he opined that the sales-comparison approach, rather than the income-capitalization approach, was a better indicator of the value of 230 Boston Avenue.  Accordingly, in Mr. Wolff's opinion, the fair market value of 230 Boston Avenue was its value under his sales-comparison approach, $440,000.  
The assessors offered into evidence the testimony of Mr. Edward O'Neil, chief assessor for Medford, who was involved with the valuation of both of the subject properties.  The Board found his testimony to be credible.  Mr. O'Neil testified that the cost approach was used to value 230 Boston Avenue because the building was relatively new.  In their cost approach, the assessors used information taken from building permits taken out during the same time period as the construction of 230 Boston Avenue, to arrive at the final assessed value of $844,800.   
Mr. O'Neil then testified regarding the valuation of 222 Boston Avenue.  He stated that while more than one approach was used, the assessors ultimately relied most heavily upon the income-capitalization approach.  Mr. O'Neil further testified that they relied heavily upon information from the adjacent property, 200 Boston Avenue, which he considered comparable to 222 Boston Avenue.  Mr. O'Neil testified that 200 Boston Avenue had rents in a range of $17.26 to $33.31 per square foot, according to that property's owner.  After gathering information from comparable buildings in the surrounding area, including 200 Boston Avenue, the assessors arrived at an industrial warehouse rent of $9.35 per square foot and $16.50 per square foot for office space.  The assessors allocated 21,240 square feet as industrial warehouse space and 5,728 square feet as office space. Based upon information gathered from buildings in the surrounding area, the assessors used a 6% vacancy rate and then an expense rate of 16% for industrial warehouse space and 4% for office space, to achieve an NOI of $224,329.  Capitalizing at a rate of 12.6%, including the tax factor, the assessors arrived at an assessed value of $1,780,400.  
With respect to 222 Boston Avenue, the Board, like the parties, found that the income-capitalization approach was an appropriate method for determining its fair market value.  However, the Board found serious flaws in both the sales-comparison and income-capitalization analyses of the appellant's expert witness which called into question the accuracy of his appraisal.  For example, Mr. Wolff did not include in his sales-comparison analysis 200 Boston Avenue, a rehabilitated, formerly industrial, multi-story, multi-tenant building located immediately next door to 222 Boston Avenue, despite testifying that the two buildings were similar as far as type of construction and location.  Mr. Wolff did not provide any explanation of his failure to include 200 Boston Avenue in his sales-comparison approach, despite at one point testifying that it was the only building that had any commonality with 222 Boston Avenue.  At the same time, Mr. Wolff did include 200 Boston Avenue in his income-capitalization approach, despite testifying that the two buildings, in his opinion, would not attract the same type of users.  The Board found that this inconsistency detracted from the credibility of Mr. Wolff's opinion.
Although Mr. Wolff testified that the office rents at 200 Boston Avenue were probably the best indicator for the values at 222 Boston Avenue, and also that 200 Boston Avenue was the only building that had any commonality to 222 Boston Avenue, his conclusion of $14 per square foot for office space at 222 Boston Avenue was significantly lower than the $16.95 to $19.95 per square foot rent that he cited for office space at 200 Boston Avenue, and significantly lower than the $16.50 per square foot rent used by the assessors.  Although he had done so in his sales-comparison analysis, Mr. Wolff failed to provide any details of the adjustments he made to his comparable properties or other support for his conclusion of $14 per square foot for office space.  Furthermore, the rental range for 200 Boston Avenue cited by Mr. Wolff is at odds with the testimony of Mr. O'Neil, who testified that 200 Boston Avenue had a rental range of $17.26 to $33.31 per square foot during the relevant time period.  The record contains insufficient evidence on which the Board could base a finding as to which range is correct.  However, the Board found that Mr. Wolff's conclusion of $14 per square foot for office space at 222 Boston Avenue was significantly lower than the rents he cited for 200 Boston Avenue.  Given that it was more proximate to both of the reported rental ranges for 200 Boston Avenue, the Board found that the assessors' valuation of $16.50 per square foot was a more reliable estimate.      
The Board found that Mr. Wolff's analysis of the industrial rents of 222 Boston Avenue was similarly flawed.  Upon cross-examination, Mr. Wolff admitted that all of his comparable industrial properties were actually freestanding, industrial warehouse buildings, and did not entail storage space in mixed-use buildings, like the storage space in 222 Boston Avenue.  The Board thus found that the properties considered as comparable industrial properties by Mr. Wolff were in fact not comparable.  Mr. Wolff also failed to provide any detail of the adjustments he made to his comparable properties or other support for his conclusion of $8 per square foot for industrial space. The Board therefore found that Mr. Wolff's valuation of $8 per square foot for the industrial warehouse space in 222 Boston Avenue was not a reliable estimate.    
With respect to 230 Boston Avenue, Mr. Wolff relied on the sales-comparison approach for his estimate of market value.  However, the Board found that the properties selected for comparison by Mr. Wolff were not extensive or truly comparable enough to provide an adequate indication of value for 230 Boston Avenue. Mr. Wolff made adjustments for location, physical condition and building size to one of the properties, 33 Dartmouth Street in Malden, in the total amount of 60%.  The Board therefore found that this property was not comparable, leaving only two properties to form the basis of Mr. Wolff's sales-comparison analysis.  The Board did not consider the information extrapolated from such a small sample to be reliable evidence of 230 Boston Avenue's value, and gave little weight to Mr. Wolff's opinion. 
 Additionally, Mr. Wolff used the same three properties in his sales-comparison analyses for both of the subject properties, despite the fact that the subject buildings were of vastly different age, size, and interior layout.  Mr. Wolff himself testified that the subject properties were "different animals."  The Board found that Mr. Wolff's use of the same three properties as comparable sales for both of the subject properties called into question the thoroughness and credibility of his analyses, and accordingly placed little weight on Mr. Wolff's opinion.  
A significant component in the values assigned by Mr. Wolff to each of the subject properties was the deduction of estimated cost of renovation. Specifically, Mr. Wolff deducted $392,610 for renovation of 222 Boston Avenue and $436,725 for renovation of 230 Boston Avenue.  The Board found the evidence submitted by the appellant in support of these adjustments insufficient in numerous respects.
 First, Mr. Wolff's basis for the renovation costs was the actual cost incurred by the appellant in renovating the fourth floor of 222 Boston Avenue in 2005. However, documentation of the actual expenses and/or specific detail about the nature of the renovations, presumably in the possession of the appellant, were not entered into evidence.  In this regard, the Board found that the evidence of record was insufficient to support Mr. Wolff's renovation estimates for both of the subject properties.  
Second, the actual renovation of 222 Boston Avenue was purportedly completed in 2005, at least two years after the relevant assessment date.  The Board found that estimates based on what Mr. Wolff determined were the actual expenses bore no sufficient correlation to expenses purportedly necessary to renovate the subject properties, and therefore could not provide reliable evidence of their valuation.  
Third, no photographic evidence of the fourth floor of 222 Boston Avenue as of the relevant assessment date was offered into evidence.  While the appellant may have invested a significant sum in renovating the fourth floor of 222 Boston Avenue in 2005, specific evidence of the nature and extent of the renovations was not submitted.  The evidence of record does not support a finding that the fourth floor was unfinished space or any less suitable for use or rental than any of the other floors as of the relevant assessment date, as suggested by the appellant, and therefore, does not support the $392,610 reduction in fair market value suggested by Mr. Wolff.  
Fourth, with respect to renovations necessary to complete 230 Boston Avenue, the Board found that Mr. Wolff's analysis lacked sufficient detail.  Specifically, Mr. Wolff's appraisal report indicated that he arrived at the $45 per square foot cost for renovation of 230 Boston Avenue by beginning with the $70 per square foot cost incurred by the appellant in 2005, and then making adjustments because 230 Boston Avenue would not require certain systems renovations.  As discussed above, Mr. Wolff provided no documentary evidence supporting the $70 per square foot cost, or any further itemization of expenses supporting a reduction to $45 per square foot. In sum, the Board found that Mr. Wolff's estimated renovation costs were unsupported by the evidence of record. 
Fifth, Mr. Wolff's estimates for the cost of renovation for both of the subject properties relied solely on actual cost incurred by the appellant in connection with the 2005 renovation of the fourth floor of 222 Boston Avenue.  Mr. Wolff offered no evidence of expenses for other, comparable renovations or any other evidence of market costs for such renovations.  The Board found his failure to consider a broader range of renovation expenses to be a flaw in his analyses.  
Lastly, with respect to his income-capitalization approach, the Board found Mr. Wolff's lump-sum deduction of the entire cost of renovation for both of the subject properties to be erroneous.  As discussed more fully in the Opinion below, the Board found that such costs should have been reflected in the net operating income or rent and spread out over the applicable lease periods.  For all of these reasons, the Board afforded Mr. Wolff's opinion little weight.  
The Board found that the evidence offered by the appellant failed to overcome the presumptive validity of the assessments at issue.  Further, the Board found that the appellee provided sufficient, credible evidence to support the assessments.  Based on the foregoing, and for the reasons detailed in the following Opinion, the Board issued its decisions for the appellee.
 
    OPINION
The assessors are required to assess real estate at its "fair cash value." G.L. c. 59, § 38.  Fair cash value is defined as the price on which a willing seller and a willing buyer will agree if both of them are fully informed and under no compulsion. Boston Gas Co. v. Assessors of Boston, 334 Mass. 549, 566 (1956).  
The appellant has the burden of proving that the property has a lower value than that assessed.  "'The burden of proof is upon the petitioner to make out its right as a matter of law to abatement of the tax.'"  Schlaiker v. Assessors of Great Barrington, 365 Mass. 243, 245 (1974) (quoting Judson Freight Forwarding Co. v. Commonwealth, 242 Mass. 47, 55 (1922)).  "[T]he board is entitled to 'presume that the valuation made by the assessors [is] valid unless the taxpayers . . . prov[e] the contrary.'"  General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 598 (1984) (quoting Schlaiker, 363 Mass. at 245).
Generally, real estate valuation experts, the Massachusetts courts, and this Board rely upon three approaches to ascertain the fair cash value of property: income capitalization; sales comparison; and cost of reproduction.  Correia v. New Bedford Redevelopment Authority, 375 Mass. 360, 362 (1978).  "The Board is not required to adopt any particular method of valuation."  Pepsi-Cola Bottling Co. v. Assessors of Boston, 397 Mass. 447, 449 (1986).  Regardless of which method is employed to determine fair cash value, the Board must determine the highest price which a hypothetical willing buyer would pay to a hypothetical willing seller in an assumed free and open market.  Irving Saunders Trust v. Board of Assessors of Boston, 26 Mass. App. Ct. 838, 845 (1989).  The validity of a final estimate of market value depends to a great extent on how well it can be supported by market data.  The Appraisal Institute, The appraisal of real estate 134 (12th ed., 2001). 
The fair cash value of property may be determined by recent sales of comparable properties in the market.  John O. Kunz v. Assessors of Middleton, Mass. ATB Findings of Fact and Reports 2006-211, 224 (citing McCabe v. Chelsea, 165 Mass. 494, 496 (1929)).  "When comparable sales are used, however, allowances must be made for various factors which would otherwise cause disparities in the comparable prices." General Cable Industries, Inc. v. Assessors of Williamstown, Mass. ATB Findings of Fact and Reports 1999-403, 414.  Appraisers generally employ both qualitative and quantitative techniques to estimate the relative significance of these factors.  The Appraisal Institute, The appraisal of real estate at 425.  
In the present appeals, the Board found that the evidence submitted by the appellant failed to support findings of value contrary to the assessed value of the subject properties.  The appellant's expert witness failed to select adequately comparable properties for comparison and omitted data from properties which the evidence showed to be comparable.  The Board found that data from the selected properties did not yield reliable estimates of value, and therefore discounted Mr. Wolff's opinion.
Additionally, the Board found that a significant component of Mr. Wolff's valuation for each of the subject properties was the deduction of estimated costs of renovation, which Mr. Wolff based entirely on the actual expenses incurred by the appellant in connection with the renovation of the fourth floor of 222 Boston Avenue in 2005. While evidence of actual expenses is probative, "expenses should reflect the market."  General Electric, 393 Mass. at 610.  Mr. Wolff did not gather comparative estimates for renovation expenses or provide any other basis for the Board to ascertain appropriate market costs of renovation.  Furthermore, despite Mr. Wolff's reliance on the actual expenses incurred by the appellant, no documentary evidence of the actual expenses or evidence regarding the nature or extent of the renovations was entered into the record. 
 Further, with respect to his income-capitalization approach, the Board found Mr. Wolff's lump-sum deduction of the entire cost of renovation for both of the subject properties to be erroneous.   "[T]enant improvements on a new building are usually capital expenditures while [tenant improvements] in an existing space being retenanted are usually an expense."  The Appraisal Institute, the appraisal of real estate (12th ed. 2001) 508.  "[E]xpenses for tenant improvements… are variable operating expenses, and as such, are deductible from gross rental income to obtain net operating income."  Analogic Corp. v. Board of Assessors of Peabody, 45 Mass. App. Ct. 605, 615 (1998).  Such expenses are spread out over the term of the lease.  See Thomas J. Flatley v. Board of Assessors of the Town of Bolton, Mass. ATB Findings of Fact and Reports 2000-372, 378; One Cambridge Center Trust, et al. v. Board of Assessors of the City of Cambridge, Mass. ATB Findings of Fact and Reports 1997-188, 212-213.  On the other hand, "[w]hen capital expenditures… are made by the lessor, reimbursement may be accomplished through marginally higher rent that amortizes the lessor's expenditures over all or part of the lease period."  The Appraisal Institute, the appraisal of real estate (12th ed. 2001) 508.  In either case, the lump-sum deduction of the entire amount to arrive at the fair market value of the subject properties was inappropriate.  For all of these reasons, the Board afforded Mr. Wolff's opinion little weight.  
The Board therefore found that the record lacked sufficient evidence to support the appellant's claimed valuation of the subject properties, or any finding of value contrary to the assessed values as supported by the appellee.  

    CONCLUSION 
Based on its review of all of the evidence, its findings of fact, and for the reasons discussed in the above Opinion, the Board issued its decisions in favor of the appellee.  
		
						APELLATE TAX BOARD

				By:	________________________________
					Thomas W. Hammond Jr., Chairman




A true copy,


Attest:____________________________  
	       Clerk of the Board

				

 On June 9, 2004, the assessors denied the appellant's Application for Abatement and on June 30, 2004, notified the appellant of the denial.  However, this denial is a nullity because the application was deemed denied on May 26, 2004, three months from the filing date, under G.L. c. 58A, § 6.  
 According to Mr. Wolff, the fourth floor of 222 Boston Avenue was not finished or suitable for rental during the fiscal year at issue, and was substantially renovated by the appellant in 2005, at an expense of $392,610.  
 "NNN" is an abbreviation for triple-net lease.  
  Mr. Wolff's projection of $436,725 was calculated using information provided to him by the appellant concerning the actual renovation costs incurred in completing the fourth floor of 222 Boston Avenue in 2005, which amounted to $70 per square foot.  However, that amount included costs for certain systems work which Mr. Wolff deemed unnecessary to complete 230 Boston Avenue.  Mr. Wolff therefore, without further explanation, adjusted the renovation costs to $45 per square foot, applied to 9,705 square feet, for a total of $436,725.  

ATB 2008-456