Lowe's Home Centers, LLC v. Board of Assessors of the Town of Saugus (July 14, 2025)

COMMONWEALTH OF MASSACHUSETTS
APPELLATE TAX BOARD
LOWE’S HOME CENTERS, LLC 	v. 	BOARD OF ASSESSORS OF
THE TOWN OF SAUGUS
Docket Nos. F332709, F335564
F337743, F339941
Promulgated:
July 14,2025
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 	Saugus 	(“appellee” 	or
“assessors”) to abate taxes on certain real estate located in the
Town 	of 	Saugus 	and 	assessed 	to 	Lowe’s 	Home 	Centers, 	LLC
(“appellant”) 	for 	fiscal 	years 	2017, 	2018, 	2019, 	and 	2020
(collectively, “fiscal years at issue”).
Commissioner 	Elliott 	heard 	these 	appeals. 	Chairman
DeFrancisco and Commissioners Good, Metzer, and Bernier joined him
in 	the 	decision 	for 	the 	appellee 	for 	Docket 	No. 	F332709, 	and 	the
decision 	for 	the 	appellant 	for 	Docket 	Nos. 	F335564, 	F337743, 	and
F339941.
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.
Michael D. Benak, Esq., Daniel Zazzali, Esq., and Nicholas W.
Allen, Esq., for the appellant.
Ellen 	M. 	Hutchinson, 	Esq., 	and 	Iwona 	Zamiejska-Wilt,
assessor, for the appellee.
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FINDINGS OF FACT AND REPORT
On the basis of testimony and exhibits entered into evidence
at the hearing of these appeals, the Appellate Tax Board (“Board”)
made the following findings of fact.
I. Introduction and jurisdiction
On 	January 	1, 	2016, 	January 	1, 	2017, 	January 	1, 	2018, 	and
January 1, 2019, the appellant was the assessed owner 	of a 15.712-
acre 	site 	comprised 	of 	three 	parcels 	of 	land 	in 	Saugus 	(“subject
property”): 	(1) 	a 	0.439-acre 	parcel 	(“parcel 	1”) 	identified 	as
1540 	Broadway; 	(2) 	a 	0.028—acre 	parcel 	identified 	as 	0 	Oriole
Avenue 	(“parcel 	2”); 	and 	(3) 	a 	15.245-acre 	parcel 	identified 	as
1500 	Broadway 	with 	a 	133,970-square-foot 	building 	(the 	building
alone 	referred 	to 	as 	“subject 	building” 	and 	the 	subject 	building
together 	with 	the 	land 	referred 	to 	as 	“parcel 	3”).1 	The 	docket
numbers 	for 	which 	the 	appellee 	requested 	findings 	of 	fact 	and
report relate only to parcel 3, but because the opinions of value
offered 	by 	both 	parties 	collectively 	encompass 	parcels 	1, 	2, 	and
3, the term “subject property” necessarily encompasses parcels 1,
2, and 3.2
1 The subject building featured a canopied 	area for pick-up and an enclosed
garden center, neither of which were considered part of the gross building area.
2 The Board concurrently heard appeals concerning parcel 1 (Docket Nos. F332707,
F335567, F337744, F339942), parcel 2 (Docket Nos. F332708, F335563, F337745,
F339943), and parcel 3 for the fiscal years at issue. The Board found for the
appellee 	for 	all 	of 	the 	parcel 	1 	and 	parcel 	2 	appeals, 	but 	neither 	party
requested findings 	of fact and report 	for any of the parcel 1 and parcel 2
appeals.
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The 	subject 	building, 	a 	concrete 	block 	building 	of 	average
quality, 	was 	constructed 	in 	2006 	and 	operated 	as 	a 	Lowe’s 	home
improvement retail store during all relevant time periods.
The 	following 	table 	details 	the 	jurisdictional 	information
concerning parcel 3 for the fiscal years at issue:
Fiscal Year
2017
Docket No.
F332709
Fiscal 	Year
2018
Docket No.
F335564
Fiscal 	Year
2019
Docket No.
F337743
Fiscal 	Year
2020
Docket No.
F339941
Assessed
Value
$16,049,300 	$17,178,800 	$17,818,300 	$18,941,100
Tax Rate 	$25.78 	$24.58 	$25.78 	$25.10
Tax Amount 	$413,750.95 	$422,254.90 	$459,355.77 	$475,421.61
Abatement
Application
Filed
02/01/17 	01/31/18 	01/30/19 	01/29/20
Payments
Without
Interest
Yes 	Yes 	Yes 	Yes
Denial 	04/24/17 	03/12/18 	02/11/19 	04/13/20
Petition 	05/05/17 	05/23/18 	05/09/19 	05/26/20
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 	William 	McLaughlin, 	whom 	the
Board 	qualified 	as 	an 	expert 	witness 	in 	commercial 	retail
valuation, and the testimony and opinion letter of Benjamin Starr,
whom the Board qualified as an expert witness in retail real estate
transactions 	in 	the 	New 	England 	states. 	The 	appellant 	also
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presented the rebuttal testimony of David Lennhoff, whom the Board
qualified as an expert witness and whose appraisal practice centers
on litigation valuation and expert testimony relating to appraisal
methodology, Uniform Standards of Professional Appraisal Practice,
and allocating assets of a going concern.
A. Mr. McLaughlin’s testimony and appraisal report
Mr. McLaughlin identified the subject property’s location as
a 	business 	zone, 	specifically 	a 	business 	highway 	subdistrict. 	He
opined 	that 	Saugus 	has 	good 	access 	to 	Boston 	and 	other 	major
employment 	areas 	within 	the 	region, 	as 	well 	as 	a 	strong
commercial/retail 	presence 	in 	the 	region 	that 	will 	allow 	the
neighborhood to remain stable over the long-term. However, he felt
that 	limitations 	related 	to 	the 	subject 	property’s 	specific
location 	- 	off 	Route 	1 	rather 	than 	on 	Route 	1 	- 	restricted 	its
potential 	within 	the 	retail 	market. 	He 	opined 	that 	the 	changing
dynamics 	of 	retail 	has 	resulted 	in 	a 	decrease 	in 	construction 	of
big-box stores, noting that many large stores are modifying their
store formats to smaller footprints when possible.
Mr. McLaughlin determined that the subject property’s highest
and best use was its current use as a large-scale, big-box retail
space. 	Though 	he 	conducted 	both 	a 	sales-comparison 	approach 	and
income-capitalization approach to value the subject property, Mr.
McLaughlin 	ultimately 	concluded 	that 	the 	income-capitalization
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approach “was most applicable” and he placed “100 percent” reliance
on the income-capitalization approach.
Mr. 	McLaughlin’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. To accomplish this,
Mr. 	McLaughlin 	researched 	and 	relied 	upon 	seven 	purportedly
comparable 	retail 	leases 	for 	properties 	located 	in 	Nashua, 	New
Hampshire; Dedham, Massachusetts; Warwick, Rhode Island; Seekonk,
Massachusetts; Taunton, Massachusetts; Framingham, Massachusetts;
and 	Milford, 	Massachusetts. 	These 	properties 	ranged 	in 	size 	from
62,676 square feet to 121,515 square feet, with lease terms ranging
from five to fifteen years and rents ranging from $6.59 to $10.06
per 	square 	foot, 	with 	an 	average 	of 	$8.05 	per 	square 	foot. 	After
Mr. McLaughlin’s adjustments, the rents ranged from $7.47 to $9.84,
with an average of $8.68 per square foot. Mr. McLaughlin determined
that a stabilized fair market rent of $8.50 on a triple net basis
was 	appropriate 	for 	each 	of 	the 	fiscal 	years 	at 	issue. 	Applying
this rate to the subject building’s 133,970 square feet, he derived
a potential gross income of $1,138,745 for each of the fiscal years
at issue.
The 	next 	step 	in 	Mr. 	McLaughlin’s 	analysis 	was 	the
determination of a vacancy and collection loss allowance. While he
noted that single-tenant properties like the subject property are
either 	100 	percent 	occupied 	or 	100 	percent 	vacant, 	he 	maintained
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that 	it 	is 	common 	for 	investors 	to 	apply 	a 	reasonable 	annual
vacancy and collection loss factor to account for the possibility
of some period of vacancy or collection loss during the ownership
period. 	He 	consulted 	industry 	sources 	for 	data, 	including
information published by CoStar, REIS, and KeyPoint, to highlight
the 	vacancy 	rates 	in 	the 	Greater 	Boston 	market, 	specifically 	the
subject property’s submarket. Based on the historical occupancy of
the 	subject 	property, 	the 	current 	vacancy 	in 	the 	market, 	and 	his
perception 	of 	future 	market 	vacancy, 	he 	projected 	a 	global
stabilized 	vacancy 	rate 	of 	5 	percent, 	to 	which 	he 	added 	a
collection 	loss 	of 	2 	percent. 	These 	allowances 	resulted 	in 	an
effective gross income of $1,059,033 for each of the fiscal years
at issue.
Turning 	to 	operating 	expenses, 	Mr. 	McLaughlin 	asserted 	that
management 	fees 	for 	retail 	property 	typically 	range 	from 	2 	to 	5
percent. He settled on a management fee of 4 percent of effective
gross 	income. 	For 	other 	expenses, 	Mr. 	McLaughlin 	deducted 	tenant
improvements at $0.30 per square foot, leasing commissions at $0.34
to 	$0.37 	per 	square 	foot, 	and 	replacement 	reserves 	at 	$0.30 	per
square 	foot, 	for 	a 	total 	line 	item 	of 	$0.95 	percent 	per 	square
foot 	for 	the 	category 	of 	“other 	expenses.” 	The 	total 	expenses
amounted 	to 	$169,633 	for 	each 	of 	the 	fiscal 	years 	at 	issue.
Deducting 	these 	expenses 	resulted 	in 	a 	net 	operating 	income 	of
$889,400 for each of the fiscal years at issue.
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For 	his 	capitalization 	rate, 	Mr. 	McLaughlin 	looked 	to
investor 	surveys 	and 	a 	band-of-investment 	analysis. 	He 	consulted
RERC and RealtyRates.com. He expressed the need to exercise caution
with 	national 	investor 	survey 	information 	when 	determining 	a
capitalization rate for a fee-simple analysis, but he acknowledged
that 	RealtyRates.com 	– 	which 	he 	espoused 	as 	the 	only 	survey 	that
has a category for freestanding retail properties - is a national
survey. 	Despite 	repeatedly 	stating 	that 	the 	subject 	property 	was
a 	freestanding, 	big-box 	retail 	property 	rather 	than 	a 	power
center,3 Mr. McLaughlin ultimately concluded that the RERC category
that best fit the subject property for capitalization rate purposes
was 	the 	power 	center 	category. 	These 	sources 	indicated 	rates
ranging from 7.6 percent to 9.68 percent from the first quarter of
2015 through the first quarter of 2019. Mr. McLaughlin’s band-of-
investment 	analysis 	yielded 	an 	indicated 	overall 	capitalization
rate of 8.31 percent. Based upon this information, Mr. McLaughlin
settled 	on 	a 	base 	capitalization 	rate 	of 	8 	percent, 	to 	which 	he
then 	loaded 	pro-rated 	tax 	factors 	reflective 	of 	his 	7 	percent
vacancy 	and 	collection 	loss 	rate 	for 	an 	ultimate 	rounded
3 In his report Mr. McLaughlin stated that “[a] Power Center would be leased
by multiple anchors and junior anchors which diversifies risk versus a big-
box property, inherently atypically large, that is leased to a single entity
and offers no diversification of tenant risk.”
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capitalization 	rate 	of 	8.25 	percent 	for 	each 	of 	the 	fiscal 	years
at issue.4
After applying the capitalization rate to his determined net
operating income, Mr. McLaughlin determined a final, rounded fair
cash 	value 	of 	$10,800,000 	for 	each 	of 	the 	fiscal 	years 	at 	issue
for the subject property. Mr. McLaughlin allocated this amount as
follows to parcel 1, parcel 2, and parcel 3, for each of the fiscal
years at issue, with parcel 1 and parcel 2 remaining at their full
assessed values:
Fiscal Year
2017 	– 	Fair
cash value
Fiscal 	Year
2018 	- 	Fair
cash value
Fiscal 	Year
2019 	- 	Fair
cash value
Fiscal 	Year
2020 	- 	Fair
cash value
parcel 1 	$ 	166,500 	$ 	178,400 	$ 	183,400 	$ 	203,200
parcel 2 	$ 	66,200 	$ 	70,500 	$ 	78,600 	$ 	82,100
parcel 3 	$10,567,300 	$10,551,100 	$10,538,000 	$10,514,700
Total 	$10,800,000 	$10,800,000 	$10,800,000 	$10,800,000
B. Mr. Starr’s testimony and opinion letter
Mr. 	Starr 	considered 	the 	subject 	property 	as 	having 	certain
limitations that impacted its marketability and attractiveness to
retail market participants. He discussed traffic patterns and the
lack 	of 	retail 	prominence 	hindering 	the 	subject 	property 	as
compared 	to 	“more 	desirable 	retail 	locations, 	such 	as 	the 	Square
One Mall and Saugus Plaza” with “easy ingress and egress from both
4 As noted by the appellee during cross-examination, the tax rates used in Mr.
McLaughlin’s analysis were incorrect. Mr. McLaughlin used tax rates of $26.51,
$25.78, $24.58, and $25.78, respectively, for fiscal years 2017 through 2020,
versus the actual tax rates of $25.78, $24.58, $25.78, and $25.10, for fiscal
years 2017 through 2020, respectively. Mr. McLaughlin insisted that these errors
would not impact his determination of an 8.25 percent capitalization rate.
ATB 2025-242

northbound 	and 	southbound 	Route 	1 	as 	well 	as 	communities 	to 	the
east and west.”
He 	cited 	the 	familiar 	real 	estate 	principle 	that 	as 	size
increases, 	unit 	price 	decreases, 	attributing 	this 	“in 	large 	part
due 	to 	the 	diminishing 	number 	of 	potential 	tenants 	as 	you 	climb
higher in size” and to economies of scale in constructing big-box
spaces 	contributing 	to 	lower 	construction 	costs 	on 	a 	per 	square
foot basis. “Taken together,” he opined, “the impact is such that
the further below the large-scale big-box foot threshold, the less
comparable a space is to the” subject property.
Mr. 	Starr 	highlighted 	the 	extensive 	cost 	and 	potential
infeasibility 	as 	obstacles 	to 	“demising” 	the 	subject 	property’s
space 	into 	smaller 	tenant 	spaces. 	He 	also 	suggested 	that 	Lowe’s
entered the New England market a decade after Home Depot and Lowe’s
often 	had 	to 	settle 	for 	inferior 	real 	estate 	locations 	as 	a
consequence, with multiple Lowe’s location closures in New England
versus zero Home Depot location closures in New England since each
respectively entered the New England market.
C. Mr. Lennhoff’s rebuttal testimony
Mr. 	Lennhoff’s 	testimony 	chiefly 	aspired 	to 	rebut 	the
testimony 	of 	Thomas 	J. 	Jensen, 	the 	appellee’s 	appraiser, 	whose
testimony 	is 	discussed 	in 	detail 	below. 	Mr. 	Lennhoff 	testified
that in valuing a fee simple interest a historical occupant is not
considered, 	and 	that 	“fee 	simple 	has 	nothing 	to 	do 	with 	the
ATB 2025-243

business. 	It 	has 	to 	do 	with 	the 	real 	estate 	in 	which 	this
particular occupant happens to be doing business.”
III. The appellee’s case
The 	appellee 	presented 	its 	case 	primarily 	through 	the
testimony 	and 	appraisal 	report 	of 	Mr. 	Jensen, 	whom 	the 	Board
qualified 	as 	an 	expert 	witness 	in 	commercial 	real 	estate
appraisals.
Mr. 	Jensen 	“didn't 	observe 	anything 	that 	[he] 	considered
functional obsolescence when [he] inspected the property,” and he
contended 	that 	the 	subject 	property 	“is 	the 	appropriate 	size,
roughly, for a home improvement center for a national chain. It's
also a similar appropriate size for a wholesale club.”
Mr. Jensen discussed his impression of a power center, which
he 	considered 	to 	be 	a 	large, 	big-box 	retail 	center 	with 	a 	half-
dozen to twenty tenants. He did not consider the subject property
to be a power center but rather a single-user, freestanding retail
building 	with 	above-average 	access, 	noting 	that 	“[t]he
Massachusetts DOT reported Broadway (Route 99) to have an average
daily 	traffic 	count 	of 	10,627 	in 	2018 	in 	front 	of 	the 	subject
site.”
Mr. Jensen determined that the subject property’s highest and
best 	use 	was 	its 	continued 	retail 	use. 	He 	conducted 	an 	income-
capitalization 	approach 	to 	value 	the 	subject 	property 	“because
fair 	cash 	value 	typically 	relies 	solely 	on 	the 	income
ATB 2025-244

capitalization 	approach 	and 	there 	was 	sufficient 	market 	data
available 	to 	develop 	a 	reliable 	value 	estimate 	based 	on 	the
approach.” 	However, 	“recent 	sales 	of 	similar 	properties 	in 	the
local 	market 	were 	included 	primarily 	for 	informational 	purposes
and 	for 	more 	detailed 	background 	related 	to 	market 	extracted
capitalization rates.”
To 	begin 	his 	income-capitalization 	approach, 	Mr. 	Jensen
selected 	purportedly 	comparable 	leases 	from 	which 	to 	determine 	a
fair 	market 	rent 	for 	the 	subject 	property. 	He 	believed 	it 	was
important 	to 	find 	comparable 	leases 	as 	close 	as 	possible 	to 	the
subject property, balanced with the need for an adequate-sized set
of comparable leases. In his opinion, when in a major metropolitan
area 	such 	as 	Boston, 	as 	one 	moves 	closer 	to 	the 	downtown 	of 	that
major city, the population density tends to increase and therefore
underlying land values tend to increase.
Mr. 	Jensen 	researched 	and 	relied 	upon 	five 	purportedly
comparable 	retail 	leases 	for 	properties 	located 	in 	Saugus,
Massachusetts; 	Medford, 	Massachusetts; 	Franklin, 	Massachusetts;
Wilmington, 	Massachusetts; 	and 	Stoneham, 	Massachusetts. 	These
properties ranged in size from 24,272 square feet to 119,545 square
feet, with lease terms ranging from ten to twenty years and rents
ranging from $10.40 to $21.27 per square foot. For adjustments, no
ATB 2025-245

quantitative range was developed.5 Mr. Jensen instead developed a
qualitative 	range. 	From 	this 	analysis, 	he 	selected 	a 	market 	rent
of $12.00 per square foot on a triple net basis, with increases of
2 	percent 	for 	fiscal 	years 	2018 	to 	2020 	to 	reflect 	market
increases. 	Applying 	this 	rate 	to 	the 	subject 	building’s 	133,970
square feet, he derived a potential gross income of $1,607,640 for
fiscal year 2017, $1,639,793 for fiscal year 2018, $1,673,287 for
fiscal year 2019, and $1,706,778, for fiscal year 2020.
Turning to vacancy and collection loss, Mr. Jensen projected
a stabilized vacancy rate and credit loss of 5 percent based on a
review 	of 	market 	conditions 	and 	the 	subject 	property’s 	occupancy
history. He indicated that when it comes to a property occupied by
a 	company 	such 	as 	Lowe’s, 	he 	considers 	it 	to 	be 	consistent 	with
market 	participants 	not 	to 	take 	a 	credit 	loss 	on 	a 	property 	that
is 	100 	percent 	occupied 	by 	Lowe’s 	given 	their 	financial 	stature,
and 	thus 	5 	percent 	was 	inclusive 	of 	both 	vacancy 	and 	collection
loss.
Turning 	to 	operating 	expenses, 	Mr. 	Jensen 	maintained 	that 	a
reasonable 	management 	expense 	for 	a 	single-tenant, 	triple-net-
leased retail center was 2.5 percent of effective gross income. He
5 Mr. Jensen testified that he made qualified adjustments rather than quantified
adjustments 	because 	“[i]t 	can 	be 	a 	challenge 	to 	come 	up 	with 	a 	specific
percentage for each of these deviations from the subject property whether it be
beneficial or a detriment. And I think that by using quantified adjustments, it
can diminish the reliability of the conclusion if you're being that specific.”
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explained that triple-net properties are typically self-managed by
the 	tenant 	so 	there 	is 	very 	nominal 	oversight 	required 	by 	the
landlord. Considering the subject’s age and what he thought was a
well-maintained condition, he used a replacement reserve of $0.25
per 	rentable 	square 	foot 	of 	building 	area, 	which 	he 	felt 	was
consistent with typical market participants’ behavior. He declined
to apply any tenant improvement allowances or leasing commissions,
rationalizing that the property is not a vacant building that needs
to 	be 	leased 	up. 	Deducting 	these 	expenses 	resulted 	in 	a 	net
operating 	income 	of 	$1,455,584 	for 	fiscal 	year 	2017, 	$1,486,129
for 	fiscal 	year 	2018, 	$1,516,390 	for 	fiscal 	year 	2019, 	and
$1,547,410 for fiscal year 2020.
For 	his 	capitalization 	rate, 	Mr. 	Jensen 	considered 	an
analysis of market extraction based on comparable sales; investor
surveys; 	band 	of 	investment; 	and 	interviews 	with 	market
participants, 	with 	most 	reliance 	placed 	on 	market 	extraction,
investor surveys, and market participants.
Mr. 	Jensen 	performed 	two 	separate 	market 	extractions, 	one
involving 	four 	sales 	of 	local 	properties 	and 	one 	involving 	six
sales of Lowe’s around the country. Capitalization rates from both
extractions ranged from 5.06 percent to 6.39 percent. He reviewed
the 	PWC 	Real 	Estate 	Investor 	Survey 	for 	the 	National 	Net 	Lease
Market, which indicated going-in capitalization rates ranging from
5.25 percent to 9.00 percent. He noted that the National Net Lease
ATB 2025-247

Market survey includes other asset classes and is considered less
reliable 	than 	surveys 	focused 	strictly 	on 	net 	leased 	retail
properties. He also considered the Net Lease Market Report prepared
by 	The 	Boulder 	Group, 	which 	indicated 	going-in 	capitalization
rates 	for 	the 	retail 	sector 	ranging 	from 	6.10 	percent 	to 	6.25
percent.
Mr. 	Jensen’s 	band-of-investment 	analysis 	resulted 	in 	a 	6.23
percent capitalization rate and his market participant interviews
indicated capitalization rates between 6 percent and 6.25 percent.6
Based 	upon 	this 	information, 	Mr. 	Jensen 	settled 	on 	a 	base
capitalization rate of 6.25 percent, to which he then loaded pro-
rated 	tax 	factors 	reflective 	of 	his 	5 	percent 	vacancy 	rate 	to
derive capitalization rates of 6.38 percent for fiscal year 2017,
6.37 	percent 	for 	fiscal 	year 	2018, 	6.38 	percent 	for 	fiscal 	year
2019, and 6.38 percent for fiscal year 2020.
After applying the capitalization rates to his determined net
operating 	income, 	Mr. 	Jensen 	determined 	final, 	rounded 	fair 	cash
values 	for 	the 	subject 	property 	of 	$22,800,000 	for 	fiscal 	year
2017, 	$23,300,000 	for 	fiscal 	year 	2018, 	$23,800,000 	for 	fiscal
year 	2019, 	and 	$24,400,00 	for 	fiscal 	year 	2020. 	Unlike 	Mr.
6 Mr. Jensen testified that he based the development of a capitalization rate
in part on Lowe’s credit rating and acknowledged that the capitalization rate
could 	“[p]ossibly” 	have 	changed 	if 	the 	subject 	property 	were 	occupied 	by 	a
tenant with a lower credit rating than Lowe’s.
ATB 2025-248

McLaughlin, 	Mr. 	Jensen 	did 	not 	allocate 	his 	values 	individually
among parcels 1, 2, and 3.
IV. The Board’s findings
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 	fiscal 	years 	2018, 	2019, 	and
2020. 	The 	Board 	found 	and 	ruled 	that 	the 	appellant 	did 	not 	meet
its burden for fiscal year 2017.
In 	reaching 	these 	conclusions, 	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 	as 	of 	the
relevant assessment dates for the fiscal years at issue. 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 strictly adopt any particular expert’s elements of value.
The 	Board 	found 	inherent 	limitations 	with 	both 	parties’
experts, 	from 	the 	appellant’s 	and 	appellee’s 	experts’ 	respective
underestimation and overestimation of the subject property’s value
reflective 	of 	its 	location 	in 	Saugus, 	to 	Mr. 	McLaughlin’s
inconsistent testimony and reliance on national surveys and power
centers. The aggregate of the record, however, provided the Board
with 	sufficient 	evidence 	to 	form 	its 	own 	judgment 	as 	to 	the 	fair
ATB 2025-249

cash value of the subject property for each of the fiscal years at
issue.
The Board was unpersuaded by the appellant’s critique of Mr.
Jensen and whether his analysis truly valued a fee-simple interest
versus 	leased-fee 	interest. 	The 	Board 	found 	that 	the 	expert
testimony and reports from both parties were not inconsistent with
a fee-simple analysis.
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 $10.00 per square foot for each of the
fiscal 	years 	at 	issue. 	This 	rent 	resulted 	in 	a 	potential 	gross
income of $1,339,700 for each of the fiscal years at issue.
The 	Board 	found 	the 	appellant’s 	7 	percent 	vacancy 	and
collection 	loss 	to 	be 	excessive, 	and 	the 	Board 	instead 	adopted 	a
vacancy and collection loss rate of 5 percent. Applying this rate
resulted 	in 	an 	effective 	gross 	income 	of 	$1,272,715 	for 	each 	of
the fiscal years at issue. With respect to operating expenses, the
Board 	found 	that 	the 	record 	supported 	a 	management 	fee 	of 	2.5
percent and replacement reserves of $0.25 per square foot, but the
Board 	eschewed 	any 	tenant 	improvements 	and 	leasing 	commissions,
finding 	the 	record 	as 	it 	concerned 	such 	expenses 	to 	be 	too
speculative 	for 	such 	allowances. 	After 	deducting 	these 	expenses,
the Board determined a net operating income of $1,207,405 for each
of the fiscal years at issue.
ATB 2025-250

With 	respect 	to 	capitalization 	rates, 	the 	Board 	ultimately
selected 	a 	base 	capitalization 	rate 	of 	7.25 	percent 	for 	each 	of
the fiscal years at issue. The Board then added to this base rate
appropriate 	tax 	factors 	for 	each 	of 	the 	fiscal 	years 	at 	issue 	to
reflect its conclusion of a 5 percent vacancy rate. This resulted
in 	loaded 	capitalization 	rates 	of 	0.073789 	for 	fiscal 	year 	2017,
0.073729 for fiscal year 2018, 0.073789 for fiscal year 2019, and
0.073755 	for 	fiscal 	year 	2020. 	After 	applying 	these 	rates 	to 	its
concluded 	net 	operating 	income, 	the 	Board 	determined 	a 	rounded
fair 	cash 	value 	for 	the 	subject 	property 	of 	$16,350,000 	for 	each
of the fiscal years at issue.
[This space intentionally left blank.]
ATB 2025-251

As 	with 	the 	parties’ 	final 	opinions 	of 	value, 	the 	Board’s
determination 	of 	fair 	cash 	value 	comprised 	the 	entirety 	of 	the
subject 	property 	- 	parcels 	1, 	2, 	and 	3. 	But 	because 	the 	actual
income-producing property was parcel 3, the parcel containing the
subject building, the Board agreed with the appellant and allocated
the 	reduction 	in 	assessed 	value 	solely 	to 	parcel 	3, 	with 	parcels
1 	and 	2 	remaining 	at 	their 	full 	assessed 	values. 	The 	following
table details the Board’s findings:
Fiscal Year
2017
Fiscal Year
2018
Fiscal Year
2019
Fiscal Year
2020
Gross potential
income ($10 x
133,970)
$1,339,700 	$1,339,700 	$1,339,700 	$1,339,700
Vacancy (5%) 	$66,985 	$66,985 	$66,985 	$66,985
Effective gross
income
$1,272,715 	$1,272,715 	$1,272,715 	$1,272,715
Expenses:
Management
(2.5%)
$31,818 	$31,818 	$31,818 	$31,818
Repl. Res.
($.25 x
133,970)
$33,493 	$33,493 	$33,493 	$33,493
Total Expenses 	$65,310 	$65,310 	$65,310 	$65,310
NOI 	$1,207,405 	$1,207,405 	$1,207,405 	$1,207,405
Cap. Rates 	0.073789 	0.073729 	0.073789 	0.073755
Value
indications
$16,362,935 	$16,376,251 	$16,362,935 	$16,370,478
Value rounded 	$16,350,000 	$16,350,000 	$16,350,000 	$16,350,000
Assessed values
parcels 1 and 2
$232,700 	$248,900 	$262,000 	$285,300
FCV of parcel 3
(rounded minus
assessed values
parcels 1 and 2
$16,117,300 	$16,101,100 	$16,088,000 	$16,064,700
Assessed value
parcel 3
$16,049,300 	$17,178,800 	$17,818,300 	$18,941,100
Overvaluation
(assessed value
parcel 3 minus
reduced
rounded)
($68,000) 	$1,077,700 	$1,730,300 	$2,876,400
Abatement
(tax rate
applied to
overvaluation)
$0.00 	$26,489.87 	$44,607.13 	$72,197.64
ATB 2025-252

Based on the above findings, the Board issued a decision for
the appellee for fiscal year 2017, and a decision for the appellant
for fiscal years 2018, 2019, and 2020, with respective abatements
of $26,489.87, $44,607.13, and $72,197.64 concerning parcel 3.
OPINION
The 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 has the
burden of proving that the property at issue has a lower value than
its assessed value. “The burden of proof is upon the petitioner 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)). 	The 	assessment 	is 	presumed 	valid 	until 	the
taxpayer sustains its burden of proving otherwise. Schlaiker, 365
Mass. at 245.
In determining fair cash value, all uses to which the property
was or could reasonably be adapted on the relevant assessment dates
should 	be 	considered. Irving 	Saunders 	Trust 	v. 	Assessors 	of
Boston, 	26 	Mass. 	App. 	Ct. 	838, 	843 	(1989). 	“In 	determining 	the
property’s highest and best use, consideration should be given to
ATB 2025-253

the 	purpose 	for 	which 	the 	property 	is 	adapted.” Peterson 	v.
Assessors of Boston, Mass. ATB Findings of Fact and Reports 2002-
573, 	617 	(citation 	omitted), aff'd, 	in 	relevant 	part, 	62 	Mass.
App. Ct. 428 (2004). 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
property.
Generally, 	real 	estate 	valuation 	experts, 	Massachusetts
courts, and the 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). 	It 	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 	found 	and
ruled 	that 	the 	income-capitalization 	approach 	was 	the 	most
appropriate method to value the subject property.
ATB 2025-254

“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 Street 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 452.
Imputing rental income to the subject property based on fair
market rentals from comparable properties is evidence of value if,
once 	adjusted, 	they 	are 	indicative 	of 	the 	subject 	property’s
earning capacity. See Correia v. New Bedford Redevelopment Auth.,
5 	Mass. 	App. 	Ct. 	289, 	293-94 	(1977), aff'd 	on 	other 	grounds, 	375
Mass. 	360 	(1978). 	Vacancy 	rates 	must 	also 	be 	market 	based 	when
determining fair cash value. Olympia & York State Street Co., 428
Mass. 	at 	239. 	After 	accounting 	for 	vacancy 	and 	rent 	losses, 	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
ATB 2025-255

market. See Olympia 	& 	York 	State 	Street 	Co., 	428 	Mass. 	at 	239.
Lastly, 	the 	capitalization 	rate 	selected 	should 	consider 	the
return 	necessary 	to 	attract 	investment 	capital. Taunton
Redevelopment Assocs., 393 Mass. at 295.
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
could 	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
ATB 2025-256

does 	not 	follow 	. 	. 	. 	that 	this 	conclusion 	was, 	therefore,
unsupported 	by 	the 	evidence.” The 	Court 	noted 	that 	“[t]he 	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.”).
In 	evaluating 	the 	evidence 	before 	it 	in 	these 	appeals, 	the
Board 	selected 	among 	the 	various 	elements 	of 	value 	presented 	by
the parties. General Electric Co. v. Assessors of Lynn, 393 Mass.
591, 	604 	n.9 	(1984) 	(“The assessors’ 	argument 	that 	the 	figures
supplied 	by 	[the 	appraiser] 	and 	by 	the 	admission 	differed
significantly 	is 	irrelevant. 	Both 	figures 	were 	less 	than 	half 	of
the 	assessment 	and 	were 	therefore 	still 	persuasive 	that 	the
assessment was incorrect.”); North American Philips Lighting Corp.
v. 	Assessors 	of 	Lynn, 	392 	Mass 	296, 	300 	(1984); 	Liberty 	Norfolk
Dev. II, LLC v. Assessors of Norfolk, 90 Mass. App. Ct. 1110 (2016)
(decision under Rule 1:28) (“Nor do we see any reason to set aside
the 	board’s 	own 	determination 	of 	the 	fair 	market 	rent 	of 	the
subject 	property, 	where 	it 	was 	the 	product 	of 	its 	own 	analysis
based upon the evidence.”). While the Board declined to adopt any
particular expert’s elements of value in their entirety, the record
ATB 2025-257

in 	the 	aggregate 	afforded 	the 	Board 	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.
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 parcel 3’s
assessed value exceeded its fair cash value for fiscal years 2018,
2019, and 2020, but failed to meet its burden for fiscal year 2017.
Relying 	on 	the 	information 	contained 	in 	the 	record, 	and 	after
exercising 	its 	own 	independent 	judgment, 	the 	Board 	ultimately
determined fair cash values for parcel 3 of $16,117,300 for fiscal
year 2017, $16,101,100 for fiscal year 2018, $16,088,000 for fiscal
year 	2019, 	and 	$16,064,700 	for 	fiscal 	year 	2020, 	with 	abatements
of 	$26,489.87, 	$44,607.13, 	and 	$72,197.64, 	respectively, 	for
fiscal years 2018, 2019, and 2020.
Accordingly, the Board found and ruled for the appellant for
fiscal years 2018, 2019, and 2020, and for the appellee for fiscal
year 2017.
THE APPELLATE TAX BOARD
By: 	__________________________________
Mark J. DeFrancisco, Chairman
A true copy,
Attest: ________________________
Clerk of the Board
ATB 2025-258