Liberty Street Apartments LLC v. Little Ferry Borough
Docket Nos. 006608-2023; 004640-2024; 005457-2025
TAX COURT OF NEW JERSEY
July 2, 2026
JOSHUA D. NOVIN, Judge
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE TAX COURT COMMITTEE ON OPINIONS
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
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
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
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
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
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 (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
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
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. 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);
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 (10th 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, 3rd quarter 2023, and 3rd quarter 2024: (ii) ACLI tables for the 3rd quarter 2022, 3rd quarter 2023, and 3rd quarter 2024; and (iii) PwC Real Estate Investor Surveys (“PwC Surveys“), Mid-Atlantic Region, for the 3rd quarter
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:
| 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 |
| 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 |
| 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, 2024 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, 2024 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
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
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.” Appraisal Institute, The Appraisal of Real Estate 466 (14th 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
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 3rd 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
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
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
In addition, the court‘s review of the 3rd 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,
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
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 3rd 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
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 3rd 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
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
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
Under
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
$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.