DOCKET NO.: 05-00346.001-C-3
3 of 21
estimate the potential gross income using market rent. To
estimate the subject's market rent Salisbury used eleven rental
comparables. Seven of the comparables were located in the
Illinois cities of Alton, Normal, St. Charles, Bloomington and
Lincolnwood. Four of the comparables were located in either
Indiana or Michigan. Salisbury testified that the comparables
were anchor stores in regional malls. Salisbury testified his
rental comparable number 9 is located in the same regional mall
as the subject property. The appraisal indicated these
comparable rentals ranged in size from 79,216 to 161,630 square
feet of leased area. The comparables had leases that commenced
from 1990 to 2003. Six of the comparables had rents ranging from
$3.06 to $4.25 per square foot. The five remaining comparables
had a combination of base rents and rents based on a percentage
of sales. Salisbury indicated these comparables had rents
ranging from $3.34 to $3.92 per square foot. Comparable nine, an
anchor store in the Eastland Mall, had rents from 2002 through
2004 ranging from $3.38 to $3.52 per square foot. Salisbury
testified none of the rental comparables is a free-standing
building. He explained there is a difference between anchor
department stores and freestanding buildings. Salisbury
testified that freestanding buildings have different tenants and
different investment criteria than anchor department stores. He
testified big box stores have a limited number of users and these
big box tenants are not going to be anchor stores in malls.
Salisbury explained that it is critical for a mall with 90 to 150
inline stores to obtain high-quality tenants as anchors. The
appellant's appraiser explained if you have a freestanding big
box store, income can only be derived from that one property.
Salisbury also reviewed the retail sales at the subject property
from 2001 through 2005. Retail sales at the subject property
declined from $14,111,000 to $12,024,0000 from 2001 to 2005.
During this period the subject property had sales per square foot
of gross building area ranging from $93.44 to $79.62 per square
foot and sales per square foot of retail area ranging from
$114.11 to $97.24 per square foot. During the years 2003 to 2005
the subject had average sales per square foot of gross building
area of $81.39 per square foot. Salisbury compared the subjects
actual income to national and regional trends found in "Dollars
and Cent of Shopping Centers: 2004". He indicated that U.S.
median was $153.15 per square foot and the Midwestern median was
$146.08 per square foot. Salisbury acknowledged he had a
typographical error the top of page 41 of his appraisal
concerning the subject's three year average retail sales per
square foot of gross building area. Salisbury testified the
subject's sales were below the national median average.
Salisbury's report also indicated the U.S. median rent per square
foot for anchor stores was $2.85 per square foot and for
Midwestern stores the median was $2.45 per square foot.
Salisbury also reported that the United States median rent based
