Macy's Retail Holdings, Inc. f/k/a Federated Retail Holdings, Inc. v. Board of Assessors of the Town of Burlington (January 12, 2026)

COMMONWEALTH OF MASSACHUSETTS
APPELLATE TAX BOARD
MACY’S RETAIL HOLDINGS, INC. 	v. 	BOARD OF ASSESSORS OF
f/k/a FEDERATED RETAIL
HOLDINGS, INC.
THE TOWN OF BURLINGTON
Docket Nos. F341237, F342610
F347324
Promulgated:
January 12, 2026
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 Town of
Burlington (“appellee” or “assessors”) to abate taxes on certain real estate located in the
Town of Burlington, owned by and assessed to Macy’s Retail Holdings, Inc. f/k/a
Federated Retail Holdings, Inc. (“appellant”) for fiscal years 2020, 2021, and 2022
(collectively, “fiscal years at issue”).
Commissioner 	Elliott 	heard 	these 	appeals. 	Chairman 	DeFrancisco 	and
Commissioners Good, Metzer, and Bernier joined him in the decisions for the appellant.
These findings of fact and report are made pursuant to a request by the appellee
under G.L. c. 58A, § 13 and 831 CMR 1.34.
Laura Bellotti Cardillo, Esq., for the appellant.
Daniel P. Ryan, Esq., Caroline A. Kupiec, Esq., and Richard L. Jones, Esq., for the
appellee.
FINDINGS OF FACT AND REPORT
The hearing of these appeals encompassed two days and included the testimony
of two valuation experts and the admittance into evidence of appraisal reports and the
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requisite jurisdictional documents, and additional exhibits referenced at the hearing.1 The
parties submitted a Joint Stipulation of Facts and post-hearing briefs.
On the basis of the evidence of record, including testimony, the exhibits entered
into evidence, and the Joint Stipulation of Facts, the Appellate Tax Board (“Board”) made
the following findings of fact.
I. Introduction and Jurisdiction
On January 1, 2019, January 1, 2020, and January 1, 2021, the relevant valuation
and assessment dates for the fiscal years at issue, the appellant was the assessed owner
of a 17.403-acre parcel of land improved with a three-story retail building containing
254,712 square feet of gross leasable area, located at 75 Middlesex Turnpike within the
Burlington Mall (“subject property”). The Burlington Mall (“Mall”) is a Class A retail mall
with approximately 1,264,000 square feet of gross leasable area. The subject property is
situated at the junction of Interstate I-95 (“Route 128”) and the Middlesex Turnpike, and
has direct access and visibility from Route 128. The immediate neighborhood is densely
developed with a mix of office, retail, and medical uses, along with several hotels.
During the fiscal years at issue, the retail structure operated as a Macy’s
department store (“Macy’s store”), and a small portion of the subject property was leased
for use as outdoor seating by the abutting Cheesecake Factory Restaurant. Others
among the approximately 176 tenants in the Mall as of the relevant dates of valuation
included Legal Sea Foods and upscale retailers such as Apple, Coach, and Burberry, in
1 The 2019 decision of the Appellate Tax Board and the 2021 Rule 23 decision of the Massachusetts Appeals Court
involving the value of the subject property for fiscal years 2014 through 2016 were entered into evidence without
objection.
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addition to Nordstrom, the Mall’s only other anchor tenant throughout the fiscal years at
issue.
The Macy’s store was built in 1968 and is attached to the two-level Mall. Its exterior
is concrete block with decorative brick veneer. The roof is flat with a rubberized cover.
Interior finishes include drywall, acoustical tile ceilings, carpet, and tile flooring. The retail
structure has three-level escalators, one passenger elevator, and one freight elevator.
Electrical, security, and fire protection systems are all adequate, as are loading docks to
the rear of the subject property.
The following table details the jurisdictional information concerning the fiscal years
at issue:
Fiscal Year 2020
Docket No.
F341237
Fiscal Year 2021
Docket No.
F342610
Fiscal Year 2022
Docket No.
F347324
Assessed Value 	$24,139,000 	$24,139,000 	$22,621,200
Tax Rate 	$25.54 	$25.85 	$26.64
Tax Amount 	$616,510.06 	$623,993.15 	$602,628.77
Abatement
Application Filed
01/31/20 	02/1/21 	02/1/22
Timely
Payments
Without Interest
Yes 	Yes 	Yes
Denial 	04/30/20 	02/17/21 	04/20/22
Petition 	08/04/20 2 	05/13/21 3 	07/27/22 4
2 The fiscal year abatement application was deemed denied on April 30, 2020 pursuant to G.L. c. 59, § 64. However,
the appellee notified the appellant that the abatement application had been denied by vote on May 6, 2020. The notice
being invalid, the Board granted the appellant two additional months, pursuant to G.L. c. 59, § 65C, in which to file its
petition, thus extending the petition’s due date to September 30, 2020. See Cardaropoli v. Assessors of Springfield,
Mass. ATB Findings of Fact and Report 2001-913, 917.
3 The appellant’s petition was stamped as received by the Board on May 18, 2021, but the petition was mailed in a
FedEx envelope bearing a shipping date of May 13, 2021. Under G.L. c. 58A, § 7, the Board ruled that the shipping
date was treated as the date of filing.
4 The assessors issued a Property Tax Abatement Denial Notice on April 21, 2022, stating that the abatement
“application was deemed denied on 4/20/2022.” However, the abatement application indicates that it was acted upon
by the assessors on April 20, 2022, and not deemed denied due to the failure of the assessors to act on the application.
Because, this notice was also invalid, the Board treated the deemed denial as having occurred on May 1, 2022, three
months after the abatement application was filed. The petition was timely filed within three months thereafter.
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Based upon these facts, the Board found and ruled that it had jurisdiction to hear
and decide these appeals for the fiscal years at issue.
II. The Appellant’s Case
The appellant presented its case primarily through the testimony and appraisal
report of Mark F. Tyburski, a licensed real estate appraiser and MAI member of the
Appraisal Institute. The parties stipulated to his qualification as an expert real estate
appraiser for purposes of these appeals.
Relative to the periods before the Board. Mr. Tyburski characterized the Mall as a
Class A, rather than a Class A+, mall due to the closing of one of the three anchor stores
– Lord & Taylor.5 However, in terms of street appeal, he rated the Macy’s store as B+,
noting declining sales and issues with age and future repairs. He pointed out that on both
sides of the Mall, the market was changing, with a mix of offices, hotels, retail stores,
restaurants, and health and entertainment facilities. He also noted the trend away from
malls and anchor stores, with retail going more toward big box retailers such as Lowe’s
or combinations of high-end stores, restaurants, and entertainment facilities.
Mr. Tyburski determined the highest and best use of the subject property to be its
existing improvement and use. He found no surplus land, concluding that additional
development was too speculative since it could not be determined as of the relevant dates
(i) whether required operating agreement approvals would be secured, or (ii) whether any
further development on the site would be allowed. Mr. Tyburski developed only an income-
capitalization approach to the valuation of the subject property, noting the inapplicability
of both (i) the cost approach, due to the property’s age and related difficulty in estimating
5 The parties stipulated that the Mall included Lord & Taylor through December of 2020. A fourth anchor store, Sears,
Roebuck and Co., closed before the fiscal years at issue.
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accrued depreciation, and (ii) the sales-comparison approach, due to a lack of sales of
anchor stores whose highest and best use remained as anchor stores for retail use in the
marketplace and not for redevelopment or repurposing.
Mr. Tyburski’s first step in his income-capitalization approach was to determine the
subject property’s potential gross income for each of the fiscal years at issue. Finding no
recent or comparable quality anchor store leases, Mr. Tyburski’s search expanded to
include an extended time frame and a broader geographic area, focusing on the
Northeast. He researched and relied upon eight purportedly comparable rents for
generally Class B anchor stores in malls located in Natick and Hanover, Massachusetts;
Concord and Salem, New Hampshire; South Portland, Maine; Milford, Connecticut; and
Woodbridge and Mays Landing, New Jersey. The three larger properties ranged in size
from 210,000 to 240,000 square feet, with the balance ranging in size from 87,736 to
158,594 square feet. Excluding one 23-year term and without regard to any renewal
options, the lease terms ranged from five to fifteen years from March 2007 through
February 2019. First year rents before adjustments were indicated to range from $3.14
to $6.15 per square foot for four gross leases and from $3.27 to $5.00 per square foot for
three triple-net leases, excluding rent of $7.32 per square foot indicated in the appraisal
for a JC Penney triple-net lease for space in the Natick Mall,6 included to demonstrate
the highest end of the range.
After adjusting his comparable lease rents to account for differences between the
lease provisions and the leased premises and the subject property, including location,
market conditions, and functionality, Mr. Tyburski estimated the subject property to have
6 In his appraisal report, the appellee’s expert referenced $7.92 per square foot, which at the hearing Mr. Tyburski
stated was the correct amount.
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a market rent of $6.00 per square foot for each of the fiscal years at issue. However, he
also estimated percentage rent since his review of the leases indicated that most had
percentage rent clauses which “kicked-in” if rent based on a percentage of store sales
exceeded the contract rent being paid. Noting percentages in leases ranging from 1
percent to 3 percent, but most between 2 percent and 3 percent, Mr. Tyburski estimated
a reasonable percentage rent of 3 percent for the Macy’s store, resulting in estimated rent
of $6.12, $6.01, and $5.20 per square foot for 2018, 2019, and 2021, respectively, which
he found to be in line with the estimated market rent from his comparable leases.7 In his
final analysis, he estimated the subject property to have a market rent of $6.00 per square
foot on a triple-net basis for the effective dates of the appraisal. Applying this rate to the
Macy’s store’s 254,712 square feet, Mr. Tyburski derived potential gross income of
$1,533,272 for each of the fiscal years at issue.
The next step in Mr. Tyburski’s analysis was the determination of a vacancy
allowance. 	Noting 	that, 	as 	a 	100 	percent 	owner-occupied 	anchor 	store 	since 	its
construction, 	the 	subject 	property 	had 	had 	a 	zero 	percent 	actual 	vacancy 	rate,
Mr. Tyburski opined that the actual vacancy rate was not reflective of vacancy risk to
investors. Based on typical lease-up periods for anchor stores of one to three years,
Mr. Tyburski projected that the actual vacancy rate for the subject property would be 1.9
percent to 5.7 percent. To arrive at his rate for each of the fiscal years at issue, he
referenced 	(i) 	CoStar 	vacancy 	indicators 	for 	the 	Mall, 	its 	mall 	peers, 	the
Burlington/Woburn market, and the Boston market for the three periods spanning each of
7 Mr. Tyburski estimated percentage rent to be $2.87 for 2020 (during COVID), based on sales of $24,397,045. He
reported sales falling from $51,943,132 in 2018 to $51,024,663 in 2019 and to $44,110,530 in 2021. The appellee’s
appraiser indicated sales of $51,089,242 for 2019.
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the effective dates of the appraisal, (ii) national vacancy assumptions for regional malls
from the PwC Real Estate Investor Survey (“PWC”) for the fourth quarters of 2018, 2019,
and 2020, and (iii) stabilized vacancy rates determined for typical five and ten year leases
by Co-Star (with respect to the Burlington/Woburn and Boston markets) and PWC (for the
national market).
Based on these indicators, and accounting for an allowance for credit loss risk and
the trend toward lower tenant retention rates as of January 1, 2021, Mr. Tyburski arrived
at a stabilized vacancy rate of 4 percent of potential gross income as of both January 1,
2019, and January 1, 2020, and of 6 percent as of January 1, 2021. These allowances
resulted in an effective gross income of $1,471,941 for each of the fiscal years 2020 and
2021, and of $1,441,276 for the fiscal year 2022.
Turning to operating expenses, Mr. Tyburski found only four to be relevant,
because market rent was estimated on a triple-net basis – (i) management fees and
replacement reserves, and (ii) insurance and real estate taxes with respect to his
estimated vacancy period. Mr. Tyburski settled on a management fee of 3.5 percent of
effective gross income, noting typical management fees ranging from 3 percent to 5
percent, based on PWC. He estimated an expense for the replacement of long-lived items
at $0.40 per square foot of building area, an amount he considered to be reasonable
based on PWC. Regarding the vacancy period, Mr. Tyburski estimated only insurance at
$0.40 per square foot based on a general market study, choosing to account for real
estate taxes in his determination of the capitalization rate. Deducting his determined
expenses totaling $157,478 for the fiscal years 2020 and 2021, and totaling $158,443 for
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the fiscal year 2022, Mr. Tyburski arrived at net operating income of $1,314,463 for each
of the fiscal years 2020 and 2021, and of $1,282,833 for the fiscal year 2022.
Turning to his capitalization rates for the relevant periods, Mr. Tyburski referred to
(i) PWC’s national institutional capitalization rates for Class A+, Class A, and Class B+
regional malls, (ii) RealtyRates’ national surveyed rates and band-of-investment rates for
Retail-Anchored Centers, and (iii) information from RealtyRates on prevailing mortgage
interest rates, loan to value ratios, amortization periods, and equity dividend rates for
Retail-Anchored Centers. From this information, he developed a capitalization rate via the
so-called Mortgage Equity Technique, which recognizes that a typical purchaser of
property like the subject will pay a major portion of the price through first mortgage
financing and own the property for a specific term over which a certain yield on equity is
anticipated.
Mr. Tyburski 	commented that 	the subject property could not be 	considered
investment grade, and hence its capitalization rate would be greater than those indicated
by PWC for the Class A to Class B+ categories. However, because the subject property
was just below investment grade, its rate would be below the average rates based on all
grades and classes of properties indicated in the RealtyRates’ survey. In conclusion, Mr.
Tyburski found that PWC’s national institutional Class B+ rates (which he considered to
be most equivalent with the subject property’s non-institutional Class A rating), and the
rates he developed from the Mortgage Equity Technique, best reflected rates applicable
to the subject property, considering its income characteristics, age, functional utility,
location, and market. He settled on a base capitalization rate of 7.25 percent for each of
the fiscal years 2020 and 2021, and of 7.50 percent for the fiscal year 2022. To these he
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loaded pro-rated tax factors 	reflective of his 	vacancy rates, for 	ultimate 	rounded
capitalization rates of 7.35 percent for each of the fiscal years 2020 and 2021 and of 7.65
percent for the fiscal year 2022.
After applying these capitalization rates to his determined net operating income,
Mr. Tyburski arrived at a final, rounded fair cash value of $17,900,000 for each of the
fiscal years 2020 and 2021 and of $16,700,000 for fiscal year 2022.
III. The Appellee’s Case
The appellee presented its case primarily through the testimony and appraisal
report of Thomas J. Jensen, a licensed real estate appraiser and MAI member of the
Appraisal Institute. The parties stipulated to his qualification as an expert real estate
appraiser for purposes of these appeals.
Mr. Jensen characterized the Mall as a Class A super regional mall because of the
quality level of the retailers. It benefited from above-average highway access and a high
average household income level within a radius of five miles of the property. Mr. Jensen
noted nearby facilities, including restaurants, a hotel, the regional offices of Oracle, and
the Lahey Clinic, and stated generally that the surrounding office parks and shopping
centers provided a source of customers. Mr. Jensen opined that the subject property had
development potential, there being excess land not needed for the current use of the site.
Regarding the structure itself, Mr. Jensen assumed that as of the three valuation dates,
the condition of the interior was sufficient to remain competitive with similar mall
department stores, noting that there did not appear to be any significant items of functional
obsolescence and no deferred maintenance. However, he pointed out that the third floor
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of the Macy’s store, which he characterized as a Class B building, did not have a direct
connection to the two-story Mall complex.
Mr. Jensen determined that the highest and best use of the subject property was
its existing retail use. He applied an income-capitalization approach to valuation, stating
it to be widely used in appraising income-producing properties. He rejected the cost
approach, concluding that accrued depreciation could not reliably be measured, and he
rejected a sales-comparison approach, given insufficient market data.
To begin his income-capitalization approach, Mr. Jensen selected five purportedly
comparable anchor store leases in super regional center/malls in Natick, Massachusetts;
Woodbridge, New Jersey; South Portland, Maine; Roseville, Minnesota; and Altamonte
Springs, Florida – indicating that his search for comparable data expanded beyond the
immediate metropolitan Boston area and included leases of anchor department stores
within mall complexes throughout the United States.8 His selected properties ranged in
size from 120,844 to 210,000 square feet. Lease terms ranged from eight to twenty years
commencing on dates from March 2007 to January 2022. Base rents determined on a
triple-net or modified gross basis ranged from $5.30 to $10.00 per square foot – with an
average of $7.87 per square foot, and the highest being for the two properties located in
Minnesota and Florida.
Taking into account transaction and characteristics adjustments for market trends,
expenses, location, rentable area, and economic characteristics, and placing less weight
on the Minnesota lease, which he described as a sale-leaseback agreement, Mr. Jensen
developed a reconciled market rent of $7.50 per square foot on a triple-net basis. Then,
8 The first three of Mr. Jenson’s comparables were also selected by the appellant’s appraiser as comparables.
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based on his analysis of comparable rentals, with consideration given to the subject
property’s five-mile average household income levels, the Mall’s premier retail complex
status, and the superior exposure of the Macy’s store, Mr. Jensen concluded market rents
per square foot, on a triple-net basis, of $7.50 for fiscal year 2020, $7.25 for fiscal year
2021, and $7.00 for fiscal year 2022, noting a decline in estimated market rent between
January 1, 2019, and January 1, 2021, due to the growth of on-line sales taking a greater
share from brick-and-mortar sales activity.
As further support for his concluded market rents, Mr. Jensen developed a market
rent for the approximately 84,904 square feet of first floor space, a discounted rental rate
for the second floor, and a further discounted rate for the third floor with no direct
connection to the Mall interior, based on the terms of five purportedly comparable leases
for retail stores in Medford, Framingham, Newton, and Stoneham. On the basis of these
leases, Mr. Jensen developed a reconciled market rent of $16.00 per square foot on a
triple-net basis for the first-floor space and of $8.00 per square foot and $2.00 per square
foot for the second- and third-floor spaces, respectively, resulting in an overall rental rate,
on a triple-net basis, of $8.67 per square foot for the entire 254,712 square foot store.
Then, concluding that a further discount would be required based on the larger size of the
Macy’s store, Mr. Jensen opined that his reconciled market rent of $7.50 per square foot
on a triple-net basis for the entire department store appeared reasonable.
Finally, applying his concluded triple-net lease market rents per square foot of
$7.50 for fiscal year 2020, $7.25 for fiscal year 2021, and $7.00 for fiscal year 2022 to the
subject property’s 254,712 square feet, Mr. Jensen derived estimated market rent of
$1,910,340 for fiscal year 2020, $1,846,662 for fiscal year 2021, and $1,782,984 for fiscal
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year 2022. He concluded that the subject property was not expected to generate other
forms of income from sources such as parking fees, signage, antennas, or percentage
rent, noting that the inclusion of percentage rent payments based on the store’s sales
activity would be considered speculative.9 However, the Cheesecake Factory was paying
an annual fee for use of an outdoor patio seating area, which the most recent data
available for review reported to be $5,000 annually. Adding this amount to his estimated
market rents, Mr. Jenson arrived at potential gross income of $1,915,340 for fiscal year
2020, $1,851,662 for fiscal year 2021, and $1,787,984 for fiscal year 2022.
Turning to vacancy, Mr. Jensen applied a stabilized vacancy and collection loss
rate of 3.5 percent of potential gross income based on a review of market conditions and
the subject property’s occupancy history, producing effective gross income of $1,848,303
for fiscal year 2020, $1,786,854 for fiscal year 2021, and $1,725,405 for the fiscal year
2022.
For expenses, Mr. Jensen took into account only two. He estimated a management
expense of 3.75 percent of effective gross income, which he concluded to be reasonable
for a single-tenant, triple-net-leased retail asset. Considering the effective age of the
Macy’s store and typical market participant behavior, he arrived at a replacement reserve
of $0.40 per square foot of building area. Deducting his determined expenses totaling
$171,196 for fiscal year 2020, $168,892 for fiscal year 2021, and $166,587 for fiscal year
2022, Mr. Jensen arrived at net operating income of $1,677,107 for fiscal year 2020,
$1,617,962 for fiscal year 2021, and $1,558,818 for fiscal year 2022.
9 Mr. Jensen stated for informational purposes that the Macy’s store had the ability to pay rent above 3 percent of gross
sales volume due to its higher profit margins, indicating its ability to pay a market rent of at least $1,500,000 to
$1,620,000 or $5.89 to $6.37 per square foot based on gross sales of $52 million to $54 million.
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Turning to his capitalization rates, Mr. Jensen considered (i) national regional mall
market capitalization rates from PWC (the same survey referenced by Mr. Tyburski) for
the fourth quarters of each of 2018, 2019, and 2020, and (ii) t he Sector Snapshot: Malls
reports from Green Street Advisors for March 2018 and December 2019 and 2020,
providing rates for the Boston area mall market based on reported publicly traded REIT
information. Taking into account the PWC rates and Green Street reports, Mr. Jensen
concluded the appropriate capitalization rates for the subject property to be approximately
6.5 percent for the January 1, 2019, valuation date; 6.75 percent for the January 1, 2020,
valuation date; and 7.0 percent for the January 1, 2021, valuation date.
However, to derive a capitalization rate, Mr. Jensen also considered investment
risk factors, including the upside potential from redevelopment, adaptation, or expansion.
He observed that a typical market participant would take into consideration the potential
for a substantial development expansion on the site, resulting in a lower overall risk profile
and reduction in the capitalization rate. He referenced (i) a Sample Shared Parking Plan
dated March 12, 2019 for 580,000 square feet of new development, and (ii) a Second
Supplemental Amendment dated April 12, 2021, to the original Operating Agreement
between the Macy’s store and the remainder of the Mall complex, referring to the potential
addition of more than 725,000 square feet of gross leasable area. Accordingly, Mr. Jensen
applied a nominal reduction of 25 basis points, resulting in capitalization rates for the
subject property of approximately 6.25 percent for fiscal year 2020; 6.50 percent for fiscal
year 2021; and 6.75 percent for fiscal year 2022. Mr. Jensen further adjusted these rates
to reflect a tax factor, resulting in ultimate capitalization rates of 6.34 percent, 6.59
percent, and 6.84 percent for fiscal years 2020, 2021, and 2022, respectively.
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After applying these capitalization rates to his determined net operating income,
Mr. 	Jensen 	arrived 	at 	final 	rounded 	fair 	cash 	values 	for 	the 	subject 	property 	of
$26,450,000 for fiscal year 2020, $24,550,000 for fiscal year 2021, and $22,790,000 for
fiscal year 2022.
IV. The Board’s Findings and Rulings
On the basis of the record in its entirety, the Board found and ruled that the
appellant met its burden of proving that the subject property was overvalued for the fiscal
years at issue.
In reaching this conclusion, the Board agreed with the parties’ experts that the
highest and best use of the subject property was its continued use as a retail property.
While the Board agreed with the parties’ selection of an income-capitalization approach
to determine fair cash value and found portions of each expert’s testimony and report to
be probative on the issue of whether the assessments were excessive, it declined to adopt
all of either expert’s elements of value. Like the appellant’s expert, the Board also
ascribed no value to surplus or excess land, the development of which it found to be
speculative.
After reviewing the leases relied upon by each of the experts in their respective
reports, the Board selected a fair market rent for the subject property of $6.50 per square
foot on a triple-net basis for each of the fiscal years at issue. Applying rent of $6.50 per
square foot, the Board found potential gross income of $1,655,628 for each of the fiscal
years at issue.
The Board found the appellee’s 3.75 percent vacancy and collection loss rate to
be reasonable. Applying this rate to potential gross income resulted in an effective gross
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income of $1,597,681 for each of the fiscal years at issue. With respect to operating
expenses, the Board found that the record supported a management fee of 3.75 percent
of effective gross income and a replacement reserve of $0.40 per square foot, with no
allowance for insurance. After deducting these expenses, the Board determined net
operating income of $1,435,883 for each of the fiscal years at issue.
With respect to capitalization rates, the Board ultimately selected a capitalization
rate of 6.75 percent for each of the fiscal years at issue, inclusive of the varying tax factor,
rejecting the appellee’s nominal reduction attributable to the development of excess land.
After applying this rate to its net operating income, the Board determined a rounded fair
cash value for the subject property of $21,300,000 for each of the fiscal years at issue.
The following table details these findings:
Income:
Potential gross income ($6.50 x 254,712) 	$1,655,628
Less: Vacancy (3.5%) 	57,947
Effective gross income 	$1,597,681
Expenses:
Management (3.75%) 	$59,913
Replacement Reserve ($0.40 x 254,712) 	101,885
Total Expenses 	$161,798
Income minus Expenses 	$1,435,883
Capitalization Rate 	0.0675
Value Indication 	$21,272,340
Value Rounded 	$21,300,000
Based on the above, the Board issued decisions for the appellant for the fiscal
years at issue, with abatements of $72,508.06, $73,359.76, and $35,191.44 for fiscal
years 2020, 2021, and 2022, respectively.
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OPINION
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 are fully informed and under no compulsion. Boston Gas Co. v. Assessors
of Boston, 334 Mass. 549, 566 (1956). A taxpayer bears the burden “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)). An assessment is presumed valid unless the
taxpayer sustains its burden of proving that the property at issue has a lower value than
its assessed value. Schlaiker, 365 Mass. at 245.
Prior to valuing the subject property, its highest and best use must be ascertained.
Tennessee Gas Pipeline Co. v. Assessors of Agawam, Mass. ATB Findings of Fact
and Reports 2000-859, 875 (citing Conness v. Commonwealth, 184 Mass. 541, 542-43
(1903)). “In determining the property’s highest and best use, consideration should be
given to the purpose for which the property is adapted.” Peterson v. Assessors of
Boston, Mass. ATB Findings of Fact and Reports 2002-573, 617 (citations omitted), aff'd
in relevant part, 62 Mass. App. Ct. 428 (2004). All uses to which the property is reasonably
adapted on the relevant assessment dates should be considered with a view toward
ascertaining what the property was then worth in the market for any legal use for which it
would bring the most. See Irving Saunders Trust v. Assessors of Boston, 26 Mass.
App. Ct. 838, 843 (1989).
In the present appeals, the Board agreed with the parties’ real estate valuation
experts that the subject property’s highest and best use was its continued use as a retail
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property. However, because property cannot be valued on the basis of hypothetical or
future uses that are remote or speculative, the Board declined to ascribe any value to the
development potential of surplus or excess land. See Macy’s Retail Holdings, Inc. f/k/a
Federated Retail Holdings, Inc., Mass. ATB Findings of Fact and Reports 2019-559,
582, aff’d, 99 Mass. App. Ct. 1124 (decision under M.A.C. Rule 23.0) (citing, in the Board’s
findings, Tigar v. Mystic River Bridge Authority, 329 Mass. 514, 518 (1952); Salem
Country Club, Inc. v. Peabody Redevelopment Authority, 21 Mass. App. Ct. 433, 435
(1986)).
Generally, real estate valuation experts, Massachusetts courts, and this Board rely
upon three approaches to determine the fair cash value of property: income capitalization,
sales comparison, and cost reproduction. 	Correia v. New Bedford Redevelopment
Auth., 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). The use of the income-capitalization approach is appropriate when
reliable cost and market-sales data are not available. 	Assessors of Weymouth v.
Tammy Brook Co., 368 Mass. 810, 811 (1975); Assessors of Lynnfield v. New
England Oyster House, Inc., 362 Mass. 696, 701-02 (1972). The income-capitalization
approach is also recognized as an appropriate technique to use for valuing income-
producing property. Taunton Redevelopment Assocs. v. Assessors of Taunton, 393
Mass. 293, 295 (1984). In these appeals, the Board agreed with the parties that the
income-capitalization approach was the most appropriate method for valuing the subject
property.
ATB 2026-17

“The direct capitalization of income method analyzes the property’s capacity to
generate income over a one-year period and converts the capacity into an indication of
fair cash value by capitalizing the income at a rate determined to be appropriate for the
investment risk involved.” Olympia & York State St. Co. v. Assessors of Boston, 428
Mass. 236, 239 (1998). “[I]t is the net income that the property should be earning, not
necessarily what it actually earns, that is the figure that should be capitalized.” Peterson
v. Assessors of Boston, 62 Mass. App. Ct. 428, 436 (2004) (emphasis in original).
Accordingly, the income stream used in the income-capitalization method must reflect the
property’s earning capacity or economic rental value. Pepsi-Cola Bottling Co., 397
Mass. at 451.
Imputing rental income to the subject property based on fair market rentals from
comparable properties is evidence of value if, once adjusted to reflect reasonable
operating expenses, they are indicative of the subject property’s earning capacity. See
Correia v. New Bedford Redevelopment Auth., 5 Mass. App. Ct. 289, 294 (1977), aff’d
on other grounds, 375 Mass. 360 (1978). Vacancy and credit loss rates must also be
market based when determining fair cash value. 	Olympia & York State St. Co., 428
Mass. at 239. After accounting for market vacancy and credit loss rates, net operating
income is obtained by deducting the landlord’s appropriate expenses. General Electric
Co. v. Assessors of Lynn, 393 Mass. 591, 610 (1984). The expenses should also reflect
the market. See 	Olympia & York State St. Co., 428 Mass. at 239. Lastly, the
capitalization rate selected should reflect the return necessary to attract investment
capital, and account for real estate taxes borne by the landlord by use of an effective tax
factor. Taunton Redevelopment Assocs., 393 Mass. at 295.
ATB 2026-18

In reaching its opinion of fair cash value in these appeals, the Board was not
required to believe the testimony of any witness or to adopt any particular method of
valuation that an expert witness suggested. Cummington School of Arts, Inc. v.
Assessors of Cummington, 373 Mass. 597, 605 (1977) (“The credibility of witnesses,
the weight of the evidence, and inferences to be drawn from the evidence are matters for
the board.”). Rather, the Board can accept those portions of the evidence that the Board
determined 	had 	more 	convincing 	weight. 	Foxboro Associates 	v. Assessors 	of
Foxborough, 385 Mass. 679, 683 (1982); New Boston Garden Corp. v. Assessors of
Boston, 383 Mass. 456, 473 (1981); New England Oyster House, 362 Mass. at 702.
The fair cash value of property cannot be proven with “mathematical certainty and must
ultimately rest in the realm of opinion, estimate and judgment.” Assessors of Quincy v.
Boston Consol. Gas Co., 309 Mass. 60, 72 (1941). See also New Boston Garden
Corp., 383 Mass. at 473.
In Boston Consol. Gas Co., 309 Mass. at 72, the Supreme Judicial Court ruled
that “the conclusion reached by the board . . . did not coincide with the figure given by
any witness, but it does not follow . . . that this conclusion was, therefore, unsupported by
the evidence.” The Court noted that the “board was not required to believe the testimony
of any particular witness but it could accept such portions of the evidence as appeared to
have the more convincing weight... . The board could select the various elements of value
as shown by the record and from them form, as it properly did, its own independent
judgment.” Id. See also New Boston Garden Corp., 383 Mass. at 473 (“The essential
requirement is that the board exercise judgment.”).
ATB 2026-19

In evaluating the evidence before it in these appeals, the Board selected among
the various elements of value presented by the parties. See 	North American Philips
Lighting Corp. v. Assessors of Lynn, 392 Mass. 296, 300 (1984). 	While the Board
declined to adopt entirely either expert’s elements of value, the record in the aggregate
afforded the Board with sufficient and probative evidence to form its own judgment as to
the fair cash value of the subject property for each of the fiscal years at issue. See Liberty
Norfolk Dev. II, LLC v. Assessors of Norfolk, 90 Mass. App. Ct. 1110 (2016) (decision
under Rule 1:28).
Based on all the evidence presented in these appeals, and reasonable inferences
drawn therefrom, the Board found and ruled that the appellant met its burden of
demonstrating that the subject property’s assessed value exceeded its fair cash value for
all of the fiscal years at issue. The Board further found and ruled that for purposes of an
income approach, the market rent for the subject property was $6.50 per square foot for
each of the fiscal years at issue, with no value attributable to surplus or excess land, and
that the record supported a management fee of 3.75 percent of effective gross income, a
replacement reserve of $0.40 per square foot, no allowance for insurance , and a
capitalization rate of 6.75 percent, inclusive of the varying tax factor, resulting in a fair
cash value for the subject property of $21,300,000 for each of the fiscal years at issue.
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ATB 2026-20

Accordingly, the Board issued decisions for the appellant in these appeals and
granted abatements in the amount of $72,508.06, $73,359.76, and $35,191.44 for fiscal
years 2020, 2021, and 2022, respectively.
THE APPELLATE TAX BOARD
By: __________________________________
Mark J. DeFrancisco, Chairman
A true copy,
Attest: ________________________
Clerk of the Board
ATB 2026-21