U.S. Property Tax Association, Inc.


Text To: 612-735-1985

Fighting For The Underdogs In Commercial Property Tax Appeals

Are big box stores being valued properly? 

On Behalf of | Aug 30, 2022 | Big-box retail

Big box stores are large retailers that sell massive amounts of various goods. Examples are places like Walmart, Meijer or Target. These are called big box stores simply because the buildings themselves are not designed with any sort of aesthetic appeal. They are simply enormous boxes in which the maximum amount of goods and products can be stored and sold.

When determining the value of these properties, which plays a major role in tax regulations, the valuations are often based on the idea that these stores are being sold to business owners. If someone wants to open a franchise location, then the store is built and leased to that individual.

Why doesn’t this work?

This is one way to look at the value of the property, but the problem is that this is not the type of property that ever hits the open market. It’s not as if a land developer creates a big box store and then shops around, trying to sell it to a franchise owner.

Instead, the person who is building the store commissions it to be built for that specific purpose. This means that it is usually a custom design created for exactly the type of store that is going in at that location. It also means that the public never knew that the property was for sale and no one else ever had a chance to lease or buy that storefront.

This can lead to some significant complications or disagreements over the valuation of a property and the tax obligations stemming from it. Be sure you know exactly what legal options you have.