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Shopping Centers

Shopping Centers are typically assessed using the Income Approach to value. There are different categories for these centers based on their purpose. Regional centers/malls consist of anchor tenants, such as Kohl’s or BestBuy. Strip and neighborhood centers consist of a mixture of national and local tenants of average quality and are the most commonly found centers. Central Appraisal Districts/Assessors will typically assess these shopping centers on the income approach using typical market information. Our office takes into account the individual characteristics (including income) of the property in order to properly estimate market value. 

Factors to consider in getting your shopping center assessment reduced

  • Has your occupancy dropped at the end of the year? 
  • Are second-floor rents different than first-floor rents?
  • Is a new product on the market that might be hurting your occupancy and rental rate? 
  • Are you considering Leasehold value versus Fee Simple value? In most states Fee Simple Value is the law. 
  • Is there deferred maintenance or roof repairs needed? 
  • Is a major tenant’s lease term expiring? 
  • Have you provided concessions and finish out allowances? 
  • Does a portion of the center lack visibility which leads to higher vacancy and lower rents? 
  • Is there a high proportion of short term leases that lead to more risk? This can lead to a higher vacancy allowance and a higher capitalization rate.
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