►
Description
No description was provided for this meeting.
If this is YOUR meeting, an easy way to fix this is to add a description to your video, wherever mtngs.io found it (probably YouTube).
A
A
Is
second
by
Mr
Lawson
all
in
favor
opposed
unanimous
head
cases
withdrawn,
okay,
so
the
next
step,
then
we
have
Mr
yanani
and.
A
B
C
You
so
starting
on
page
119
of
170
of
the
Boe
memo,
which
is
Page
150
of
our
field,
documentation.
Obviously,
a
photograph
of
the
subject
property.
This
is
the
Sonesta
select
in
Arlington,
specifically
in
Roslyn,
it's
at
1533,
Clarendon
Boulevard.
The
property
is
162
Keys.
It
was
built
in
1990
and
renovated
in
2011..
C
The
proposed
assessment
originally
for
2023
was
29.9
million
dollars.
I
believe
the
the
department
is
recommending
a
new
value
of
25.2
million
dollars.
The
value
that
we'll
be
requesting
this
morning
is
16.7
million
dollars,
bring
everybody
to
page
121
of
170
or
3
of
50
of
our
submission.
This
is
where
we
have
our
income
approach.
Unfortunately,
we
do
not
have
the
Department's
new
approach.
You
know
shown
on
here,
of
course,
but
I'm
gonna
try
to
reference
it
as
best
as
I
can
and,
of
course,
their
their
test
sheet
is
also.
C
You
know,
displays
the
same
numbers
if
you'd
like
to
follow
there.
So
just
real
quick
off
to
the
right.
We
have
our
historical
financials
from
2018
to
2022
on
the
far
left.
We
have
the
County's
original
workup
and
then
in
between
that,
under
the
Ryan
column
is
where
we're
getting
our
value.
C
So,
as
you
can
see
here
in
2022,
the
property
achieved
about
4.1
million
dollars
in
Revenue
compared
to
2019,
where
it
achieved
8.6
million
dollars
in
Revenue,
so
still
operating
it
less
than
half
of
the
pre-covered
income,
and
this
I
think
is
a
good
example
of
us,
seeing
you
know
different
types
of
properties
recovering
at
different
rates
through
covet,
and
you
know
a
clear
variability
variability
in
the
impact
of
the
pandemic
on
how
these
properties
are
going
to
be.
C
You
know,
operating
in
the
future
Additionally
the
noi
for
2022
was
about
1.1
million
dollars
which
compared
to
2019
the
noi
was
almost
3
million
dollars.
So
this
is,
you
know,
a
huge
difference,
a
huge
decline
in
Revenue
in
noi,
compared
to
a
lot
of
other
hotels
in
the
county
and
a
big
piece
of
that
is
due
to
the
increase
in
expenses
in
2022.
C
They
were
at
68
of
revenue
for
expenses,
so
the
county
originally
was
using
a
6.9
million
dollar
revenue
for
the
property
versus
the
4.1
million
in
2022,
which
we
felt
was.
You
know
too
aggressive
of
an
increase,
especially
considering
you
know
the
relative
difference
compared
to
pre-covered.
What
we
did
is
we
assumed
some
kind
of
ground
figures
to
arrive
at
a
you
know:
room
Revenue
about
5.3
million
dollars
compared
to
2022's
rate
of
3.8
million
dollars.
C
We
use
a
average
daily
rate
of
150
per
room
compared
to
142
in
2022
average,
and
we
assumed
an
occupancy
of
60,
which
we
believe
is
generous
compared
to
the
45
that
was
achieved
in
2022
and
that's
how
we
got
to
this
new
revenue
of
5.3
million.
The
the
county
has
reduced
their
room
Revenue
to
5.8
million,
which
we
do
appreciate.
However,
we
do
still
feel
that
this
is
quite
high.
This
is
projecting
a
two
million
dollar
increase
in
room
Revenue
year
over
year,
which
we
feel
is
not
supported.
C
Additionally,
for
other
income,
the
property
has
seen
a
drastic
drop-off
in
other
income.
The
food
and
beverage
income
was
sixty
one
thousand
dollars
compared
to
2019,
where
it
was
almost
half
a
million
and
then
Additionally.
The
other
income
was
about
172
000
versus
about
almost
320
19..
So
it's
still
a
big
drop
off
in
those
income
figures.
C
The
county
was
originally
using
343
and
274
000
75
000
prospectively,
which
was
you
know
more
than
a
two
times
increase,
and
they
have
centralized
food
and
beverage
income
to
236
000.,
which
is
still,
in
our
opinion,
far
too
low.
We
use
the
actual
2022
figures
and
our.
C
We
still
feel
that
the
County's
Assumption
of
236
000
is
too
high,
and
maybe
you
know
even
if
it
was
to
double
it,
would
go
to
120
000,
for
example,
I
think
that
236
is,
you
know,
not
necessarily
supported
and
then
for
the
other
income.
Similarly,
they're
at
221
thousand
and
the
actuals
in
2022
were
172
000..
This
is
maybe
a
more
reasonable.
You
know
assumption
for
recovery,
but
it
is
still
quite
aggressive.
C
Moving
on
to
expenses,
the
county
is
using
was
using
a
54.5
expense
ratio
and
has
since
updated
it
to
59.2
percent,
which
I
believe
is
the
ratio
suggested
by
the
guidelines.
C
So
you
know,
the
county
is
still
using
an
operating
expense
ratio
that
is
below
pre-covered
levels.
We
do
not
believe
that
that's
appropriate.
We
do
appreciate
that
they
are
using.
You
know
at
least
the
guidelines
in
this
approach.
However,
we
think
that
in
this
case,
it's
necessary
to
go
outside
of
that
and
capture
the
actual
performance
at
the
property,
because,
as
we'll
get
to
you
know,
the
noi
is
still
you
know
very
overstated.
Compared
to
actuals
Additionally,
the
county
was
originally
using
six
percent
reserves,
which
we
mirrored
in
our
approach.
C
C
But
the
point
here
is
the
County's
original
noi
was
2.7
million
versus
1.1
million
in
2022
and
now
in
with
the
revised
approach,
it's
still
at
2.3
million
dollars.
So
this
is
assuming
more
than
doubling
the
noi
year
over
year,
and
we
just
don't
see
the
support
for
how
that's
going
to
happen.
You
know,
of
course
it
would
be,
would
be
great
to
see,
but
it's
also
worth
pointing
out
for
2018
the,
which
is
you
know,
close
to
the
peak
of
the
market.
C
I
know
they
did
better
in
2019,
but
it's
still
pre-covered
figures
here.
Their
noi
was
2.46
Million,
which
is
not
much
higher
than
what
the
county
is
assuming
in
the
revised
approach.
So
we
feel
that
this
noi
is,
you
know,
greatly
overstated
and
that
we
think
you
know
the
way
to
capture
that
or
to
better
reflect
actual
performance
is
to
you
know,
use
an
increase,
operating
expense
ratio.
We
Believe
65
is
reasonable,
because
that
was
a
rate.
That's
it's
still
lower
than
2022's
expense
ratio,
but
it's
in
line
with
2018.
C
So
so
we
believe
that
that's
a
reasonable.
You
know
figure
to
apply
compared
to
the
counties
59.2,
which
is
lower
than
anything
that's
achieved,
since
you
know
2017
or
2018,
and
just
for
comparison
purposes.
If
we
were
to
capitalize
the
county,
noi
and
I'm
sorry,
the
actual
2022
noi
at
the
County's
Capri
and
deduct
the
personal
property
value
it
comes
out
to
about
11.4
million.
You
know
this
is
not
the
value
we're
asking
for,
but
just
for
demonstration
purposes
compared
to
the
County's
25
million.
C
Finally,
we
do
adjust
the
cap
rate
to
8.2
percent.
We
believe
that
you
know,
based
on
Market
surveys,
that
the
County's
cap
rate
is
a
little
bit
on
the
low
side.
This
is
not
the
you
know
the
Crux
of
this
position.
We
don't
think
it's.
You
know
a
major
issue,
but
it's
something
that
we
felt
that
was
worth
you
know,
presenting
to
the
board
so
using
our
proforma
noi
of
1.6
million
dollars
roughly
so
you
know
still
in
consuming
a
drastic
increase
from
2022
from
1.1
to
1.6.
C
We
get
to
a
value
with
our
cap
rate
of
17
million
dollars
before
personal
property.
After
deducting
personal
property,
it
comes
out
to
16.7
million
dollars.
We
believe
that
this
is
a
you.
A
Know
appropriate.
Excuse
me,
your
time
is
up
I'm.
Sorry,
I
can't
hear
timer,
but
no
you
can
finish
your
thought.
Okay,.
C
So
yeah,
that's
why
we
feel
our
the
value
we've
presented
is
a
reasonable
figure
and
it's
still
presenting
an
increase
in
performance
year
over
year,
and
we
feel
that
the
counties
figures
are
far
too
aggressive
and
projecting
2
million
increase
in
Revenue
two
times
increase
in
noi.
That
is
not
supported.
Thank
you.
Okay,.
D
D
A
departmental
hearing
was
not
requested
for
this
property
for
the
appraisers
notes.
The
subject
is
located
in
Roslyn
there
are
46
restaurants
within
three
tenths
of
a
mile.
It
is
located
in
near
Arlington
and
DC
nightlife.
It's
conveniently
located
within
a
five
minute,
walking
distance
to
the
Roslin
and
Metro
and
10
minute
walk.
This
is
the
courthouse
Metro.
D
D
The
department
is
fully
aware
of
the
covet
factor
for
the
hospitality
Market,
especially
for
operation
operating
years,
2020
and
2021,
and
it's
true
that
some
hotels
haven't
recovered
as
quickly
as
others.
Sonesta
select,
in
fact,
is
in
recovery.
D
D
If
you
could
pay
particular
attention
to
the
hotel
metrics
for
2021,
which
is
in
column,
C,
I'm,
referring
to
2021,
rev
par
ADR
and
occupancy,
and
then
you
compare
that
to
the
operating
year,
2022,
which
is
column
e.
D
There
was
a
91.4
percent
increase
in
rev
par
between
2021
and
2022
54.4
increase
in
ADR
in
one
year,
23.89
increase
in
occupancy
from
2021
and
2022.
Now,
let's
look
at
total
revenue
and
noi.
Within
the
one
year,
total
revenue
increased
96.27
in
one
year
and
noi
increased
1776.53
within
one
year
in
the
Department's
revision,
total
revenue
was
was
reduced.
Eight
percent
and
total
operating
expenses
were
increased
35.38,
which
is
over
the
reportings
for
2022
and
Opex.
D
This
property
was
under
appeal
in
2022
and
was
reduced
to
the
value.
That's
on
your
Boe
memo
packet
in
the
front
page
for
to
a
total
value
of
24
million
416
200.
At
the
department
level.
D
This
value
was
accepted
and
it
was
based
on
operating
years
2018
through
2021
last
year,
2021
presenting
the
most
recent
information,
the
noi
for
this
property,
again
increased
1
776
percent
in
one
year,
and
it's
a
reasonable
assumption
that,
given
a
more
yet
stable
years,
history
for
2022
that
the
property
value
would
increase
3.3
percent
over
the
value
from
last
year.
D
The
subject
is
located
in
the
Ross,
then
bid
and
due
to
limitations
in
the
in
our
system
and
rounding.
We
would
like
to
correct
the
cap
rate
from
9.08
to
9.078
percent
and
reduce
and
deduct
for
personal
property,
and
that
would
give
a
revised
value
of
25
million
222
700.
again.
This
property
is
in
recovery
and
you
can
see
that
in
the
operating
State
operating
history
here,
rev
par
ADR
and
occupancy
all
show
large
increases
across
the
board.
D
In
the
County's
revision,
we
are
allowing
for
59
expenses,
which
is
what
the
agent
has
indicated
and
that's
100
thousand
dollars
over
what
was
reported
for
2022.
now.
All
revisions
do
indicate
a
total
value
after
personal
property,
again
of
25
million
222
700,
which
is
3.3
percent
increase
of
what
was
accepted.
D
B
B
Are
going
to
go
up,
there's
going
to
be
a
better
occupancy,
but
yet
you
didn't
up
those
figures
at
all.
How.
C
C
I'm
sorry,
so
we
just
applied
the
2022
actual
figures,
because
that's
kind
of
a
standard
approach
that
you
know
we
see
in
a
lot
of
jurisdictions,
other
maybe
other
than
Arlington.
We
do
understand
a
lot
of
times.
That's
just
kind
of
standard
process
on
appeal
is
that
the
other
income
will
be
updated
to
the
previous
full
years.
However,
understand
that
you
know
Arlington
May
treat
it
differently.
C
However,
I
would
like
to
mention
that
regarding
the
food
and
beverage
income,
we
do
expect
it
to
remain
pretty
stagnant,
because
the
restaurant
is
not
open.
You
know
for
public,
which
I
believe
it
was
at
some
point
in
the
past
pre-covered
So.
Currently,
it's
only
you
know
serving
the
guests,
so
we're
definitely
expecting
a
huge
drop
off
in
that
income
compared
to
pre-covered
and
definitely
not
expecting
a
return
to
those
levels.
However,
for
the
other
income,
I
would
say
it's
probably
reasonable
to
assume
some
type
of
increase.
C
B
And
I
got
one
quick
question
for
Deitra
on
your
assessment
for
the
reserves,
you
use
six
percent
of
your
refuge
and
you
use
3.9.
Why
is
it
drop.
D
B
D
D
It's
a
stabilized
number.
F
F
D
D
If
you
look
across
the
board
at
the
operating
the
Opex
for
2019
and
then
move
across,
you
have
4.6
I'm
4.6
million
in
2019,
and
that
number
does
tend
to
it
does
dip
based
on
the
covet
Factor,
but
it's
also
starting
to
increase
based
on
2022..
This
is
another
another
stabilized
number
of
3.7
and
59.2
percent.
D
Definitely
believe
that's
the
case,
in
addition
to
the
the
reduction
to
total
revenue
he
has
allowed
for
more
and
expenses
based
on
what
they
were
reporting.
So
I
think
he
was
being
pretty
fair
here.
Okay,
good.
F
Thank
you
for
for
the
applicant
discussions
with
the
ownership
earlier
this
year,
but
not
on
January
1st,
but
earlier
than
now
did
they
feel
that
2023
was
going
to
be
an
improvement
over
2022
as
2022
was
over
2021.
C
Not
necessarily
so,
if
we
look
at
actually
my
first
note
on
page
121,
the
the
INE
survey
provided
by
the
county
allows
for
the
owner
to
report
their
budgeted
operating
figures
for
the
next
year.
In
this
case,
they
were
budgeting.
An
ADR
of
149
and
49
occupancy,
which
is
actually
less
than
I,
was
assuming
in
our
pro
forma.
C
So
in
other
words,
they
they
were
not
necessarily
projecting
a
huge
increase.
It
seems
like
you
know,
this
property
is
generally
struggling
and
there's
a
lot
of
competition
in
the
market
in
the
immediate
area
and
Rosalind
and
they're
kind
of
suffering
as
a
result.
So.
B
D
Sorry
about
that
I
was
just
going
on.
This
property
is
in
recovery,
as
can
be
seen
in
the
operating
history.
We
at
any
the
noi
increase.
In
one
year,
1776.53
total
revenue
increase
96.27.
The
property
was
under
appeal
last
year
and
accepted
the
reduction
was
accepted
for
a
value
of
24
million
four.
Sixteen
two
hundred
the
county
based
on
information
that
was
available
at
the
time
valued.
This
property
increases
property,
3.3
3.3
percent.
D
Given
the
2022
operating
history,
it
supports
that
3.3
percent
increase
and
we
recommend
that
the
the
board
revised
the
value
based
on
the
adjusting
the
cap
rate
to
25
million
222
700..
Thank
you
very
much.
C
Please
thank
you,
so
we
do
acknowledge
that
there's
a
big
increase
in
operating
performance.
However,
the
question
is
compared
to
what
noi
in
2021
and
2020
were
negative.
So
you
know
the
increases.
We
Believe
are
kind
of
not
necessarily
relevant
on
a
percentage
basis.
Additionally,
we
do
acknowledge
that
last
year
this
was
settled
at
20
about
24.8
million.
However,
last
year
we
were
still
speculating
a
massive
Improvement
in
performance
and,
quite
frankly,
in
retrospect,
now
that
we
have
another
year
of
operating
history,
we
feel
that
that
value
is
probably
too
high.
C
B
Mr
philosophy,
yeah:
why
am
I
go
ahead,
share
some
thoughts
and
see
what
others
think
you
know.
Basically
this
does
you
know
who
predicted
the
future
better.
You
know
it's
like
I
mean:
are
we
gonna
do
really
great?
Are
we
going
to
do
somewhat
great?
Obviously,
the
hotel
industry
has
been
improving
significantly
I
mean
it
looks
to
be
like
we
could
fine-tune
a
couple
of
things.
Maybe
on
the
revision
we
ought
to
up
the
reserves
on
what
the
applicant
proposed.
Maybe
we
should
adjust
those
things
somewhat.
B
I,
don't
think
what
was
agreed
to
last
year
ought
to
impact
what
happens
this
year
because,
like
the
applicants
said,
their
their
faces
are
more
information.
So
unless
someone
has
something
compelling
to
share
I
think
we
just
go
with
them.
I
would
be
willing
to
go
with
the
revision.
B
B
H
I
was
just
looking
at
the
balance
program
and
then
adjusting
the
Reserves
back
to
four
percent
and
then
I
and
I
came
up
like
18
and
a
half
million
and
I
thought.
Well,
that's
a
big
reduction
off
of
22.
H
22
is
dead
wrong.
Right
I
mean
22.
If
now
that
you
have
the
data
from
the
operating
year,
the
county
assessed
that
property
in
a
five
percent
cap
rate,
that's
absolutely
dead
wrong.
Right,
I
mean
that
money's
gone
and
out
the
window
and
it's
already
been
spent,
but
so
I
I'm,
actually
okay,
with
kind
of
a
big
reduction
from
for
23.
and
then
just
kind
of
like
high
level.
Looking
at
noi,
you
know
you're
at
one
three,
my
calculations,
you
know
one
seven
next
year,
four
hundred
thousand
dollar
increase
in
the
wide.
H
That's
a
comfortable
projecting
that
kind
of
increase
but
saying
hey:
it
went
from
zero
and
it
increased
to
91
year
over
year,
it's
going
to
increase
91
again,
like
that
logic,
doesn't
work
right.
So
if
you
upload
the
faucet
and
water
comes
out,
you
open
it
up
all
the
way
and
more
water
comes
out,
and
then
you
can't
just
keep
turning
it.
More.
Water
comes
out
indefinitely
right,
it's
got
it
at
some
point.
You
kind
of
Hit
the
max
for
the
property
and
then
just
the
other
point
is
that
I
totally.
H
F
I
I
think
expenses
yeah.
B
A
B
B
H
B
H
Took
that
he
took
the
this
thing
is
up
a
hundred
thousand
State
revenues.
H
A
H
A
That
that
I
mean
I
saw
two
arguments.
I
didn't
agree
with
the
one
from
the
county
saying
that
oh
they
agreed
to
this
last
year.
It's
only
a
slight
increase,
so
it
should
be
okay,
so
that
doesn't
hold
any
water
to
me
and
then
two
the
whole
argument.
We
hear
this
from
other
impellence
where
oh
you
know
the
guidelines
say
it
should
be
65,
but
a
dollar
amount
is
well
within
line
of
what
they're
reported.
So
I
don't
get
like
where
people
want
to
argue.
You
know
the
guidelines
when
they're
getting
more
than
officer
reported.
B
A
G
B
B
H
B
B
B
A
I
D
Just
want
to
know
which
column
you
use
I
know
you
looked
at
the
performa
just
noi
that
you
use
for
that
calculation.
A
B
A
Appreciate
it:
okay,
just
if
you
asked
me
next
week,
I
may
not
have
the
exact
calculations
all
right.
Thank
you.
Thank
you,
okay.
So
the
next
case
on
the
agenda
is
rpt34026035
at
1999,
Richmond
Highway
a
settlement
was
signed
on
that
on
July
24th.
Just
for
the
minutes
obviously
accept
that,
because
I
can't
even
do
anything
other
than
that
somebody
won
a
second
question
by
Mr
Lawson,
all
in
favor
accepted.
A
J
Yes,
thank
you,
madam
chairwoman,
members
of
the
board
Rob
Deidra
good
morning,
4250
Fairfax
Drive,
is
in
Ballston
and
was
built
in
1997..
The
issues
on
appeal
are
the
Capri
and
the
operating
expenses
Rob
and
I
inspected
this
property
on
June
7th.
On
this
inspection
we
saw
that
Amazon
has
completely
vacated
the
top
floors
of
the
building.
This
is
63
000
square
feet
of
the
space.
J
This
was
known
to
be
happening
as
of
the
data
value
and
was
included
with
the
INE
importantly
Amazon's
rental
rate
on
this
space.
63
000
square
feet
is
higher
than
the
average
of
the
other
tenants
in
place
by
4.66
per
square
foot.
Amazon
is
paying
a
10
premium
on
this
space
they
have
vacated
on
the
inspection.
We
also
saw
that
Lumen
had
vacated
its
25
000
square
feet.
On
the
fourth
floor,
we
were
told
by
the
owner
that
Lumen
had
asked
to
give
this
space
back.
This
request
was
not
accepted.
J
We
were
told
that
Lumen
is
now
trying
to
sublease
the
fourth
floor.
Again
this
war
was
vacant.
This
tenant
is
known
to
be
leading
at
the
end
of
their
lease.
Combine.
These
two
tenants
had
vacated
over
88
000
square
feet
of
space,
which
is
about
30
percent
of
the
total
nla.
At
this
building,
combined
with
the
existing
vacancy,
this
building
will
be
43
vacant.
This
greatly
increases
the
property's
risk
and
therefore
the
cap
rate.
J
These
two
tenants
were
responsible
for
just
under
4.4
million
dollars
worth
of
income.
That's
reported
for
operating
year
2022..
This
is
column
e
on
the
D
Rea
summary
page
again,
these
two
tenants
4.4
million
dollars
in
income
in
2022.
This
will
also
have
a
huge
impact
on
the
property's
value,
so
this
property
is
going
to
have
income
dropped
by
4.4
million
vacancy
increase
to
about
43
percent.
As
a
result
of
these
two
tenants
vacating.
What
does
this
tell
us
about
the
market
and
how
we
should
value
this
property?
First,
it's
risky.
J
Second,
it's
about
to
have
43
vacancy
in
a
market
with
negative
absorption.
Who
would
buy
this
property
in
this
environment,
and
can
someone
even
get
a
bank
to
approve
a
loan
for
a
property
this
risky
to
Value
this
property?
In
the
current
market?
We
need
to
increase
the
Drea
Market
tax
rate
of
only
5.7
percent,
which,
by
the
way,
this
is
a
lower
cap
rate
than
what
the
Drea
used
to
assess
Sequoia
Plaza.
That
property
has
eight
years
of
lease
term
remaining
and
is
99
occupied
by
the
Arlington
County
Government.
J
So
we
need
to
increase
the
Drea
cap
rate
by
at
least
200
basis
points
to
a
market
cap
of
7.7
percent.
This
becomes
8.9
percent
once
the
tax
rate
of
1.2
percent
is
loaded
onto
it.
Those
are
the
tap
rates
that
you
see
on
the
Drea
test.
Page
are
the
market
cap
plus
the
tax
rate
of
1.2
percent?
This
increase
in
cap
rate
is
supported
by
market
participants.
J
J
J
Additionally,
over
the
course
of
2022,
the
cost
of
financing
increased
significantly,
which
necessarily
increases
the
cap
rate
for
office
properties
over
2022,
the
Federal
Reserves
raised
interest
rates
by
425
basis
points
the
sulfur
increased
by
425
basis
points
over
2022
as
well.
The
10-year
T
Bill
increased
by
236
basis
points
over
2022..
J
As
of
the
end
of
2022,
more
rate
increases
were
known
to
be
coming
in
2023..
Increased
lending
costs
impact
the
required
return
on
an
investment,
especially
when
the
increase
is
425
basis
points.
The
last
time
we
saw
something,
this
dramatic
was
2009
when
the
10-year
t-bill
interest
rate
increased
significantly
by
160
points
the
following
year.
The
Drea
increased
cap
rates
by
175
basis
points
this
time
around
with
the
10-year
T
Bill
increasing
by
60
percent.
More
than
that
last
time,
this
time
it
increased
by
236
basis
points.
J
J
In
addition
to
the
increased
cost
of
capital,
this
property
is
riskier
due
to
those
tenants
leaving
the
building
again.
The
assessments
cap
rate
is
lower
than
what
Sequoia
Plaza
was
assessed
at
that
property,
again
I
fully
leased
by
Arlington
County.
Yet
it's
assessed
at
a
higher
cap
rate
than
what
this
property
is
with
a
pending
43
vacancy
rate.
J
The
risk
of
the
property
is
further
exacerbated
by
the
fact
that
the
market
leases
are
for
lower
Value
New
Market
leases
are
for
lower
values,
smaller
Footprints
and
shorter
terms
than
in
the
past.
Additionally,
Amazon
again
was
paying
a
10
premium
on
their
63
000
square
feet
of
space,
which
this
will
not
be
replicated.
J
All
of
these
factors
negatively
impact
the
value
of
the
property.
Additionally,
in
the
market
we
have
seen
vacancy
in
Subway
space
available,
increase
negative
net
absorption
over
the
past
three
years.
New
lease
is
again
smaller
footprint,
shorter
terms,
lower
rents,
higher
concessions
and
2.5
million
square
feet
of
new
office.
Space
was
set
to
come
online
as
of
the
first
of
the
year.
So,
to
reiterate,
reiterate
the
assessment
values,
the
property
at
a
market
cap
rate
of
only
5.7
percent.
J
Next,
the
Drea
understate
stabilized
expenses
in
two
ways:
it
fails
to
impute
operating
expenses
on
9
600
square
feet
of
office,
space
that
is
slated
to
become
amenity
space
and,
as
a
result,
the
test
column
at
operating
expenses
are
only
8.79
per
square
foot,
not
the
910.
That's
shown
on
the
test
page.
The
Drea
test
page
uses
a
different
square
footage
to
derive
the
per
square
footage
values
we
see
on
Row,
18
of
columns,
f
and
g.
J
J
J
The
reported
operating
expenses
for
prior
years
has
been
impacted
by
the
pandemic.
Over
the
past
two
years,
only
16
percent
of
the
building
was
physically
occupied,
yet
the
average
operating
expenses
over
this
period
was
eight
dollars,
25
cents
per
square
foot.
Additionally,
Amazon
has
secure
floors
and
handled
some
of
their
own
operating
expenses
which
further
dilutes
the
recorded
operating
expenses.
So
we
need
to
adjust
operating
expenses
to
reflect
a
stabilized
occupancy
with
typical
Market
tenants
and
look
at
the
sub
market.
J
For
this
doing
this,
we
impute
operating
expenses
at
ten
dollars,
fifty
cents
per
square
foot.
In
summary,
what
we
are
valuing
on
Commercial
properties
is
the
required
return,
the
risk
and
the
durability
of
the
income
stream.
In
addition
to
the
cost
of
capital,
the
office
Market
grew
significantly
riskier
over
2022
due
to
the
institutionalization
of
work
from
home
policies.
The
double
whammy
of
increased
Capital
cost
and
reduced
demand
has
sent
the
office
marketing
and
tailspin
for
this
property.
J
A
minimum
of
200
basis
points
adjustment
to
the
Capri
is
required,
as
well
as
increasing
the
operating
expenses
to
reflect
the
stabilized
occupancy
with
tenants
fully
not
paying
their
own
operating
expenses,
as
Amazon
parchment
was
doing.
Thank
you.
K
Yes,
good
morning,
everyone
for
this
case
I'd
like
to
talk
about
the
the
figures
that
Mr
Jordan
Armin
decided
earlier.
With
respect
to
the
2023
assessment
column.
D,
we
looked
at,
we
actually
afforded
less
vacant
square
footage
for
the
original
assessment
at
28
329
upon
review.
We
did
find
that
there
was
only
thirty
two
thousand
six
thirty
three
square
feet
vacant
compared
to
the
column
G,
the
pro
the
appellants
pro
forma
they're,
including
about
9619
square
feet
of
space,
that
is
to
be
converted
to
amenity
space.
K
So
when,
when
we
compare
those
figures,
that's
you
know
the
main
reason
why
we
changed
that
and
then
upon
review.
Also
we
upon
inspection.
We
did
find
that
the
square
footage
or
this
vacant
square
footage
was
not
vacant
at
the
time
of
inspection.
K
So
we
took
that
amount
out
as
well
when
looking
at
the
overall
history
of
this
property,
you
see
that
about
five
percent
vacant
in
2019
six
percent
vacant
in
2020
14
in
2021,
and
then
we
arrived
at
11
after
reviewing
the
2022
assessment,
I
mean
2022
INE.
K
When
looking
at
the
overall
change
from
our
original
assessment
to
our
test,
we
did
increase
the
vacancy
from
10
to
15
percent,
increasing
that
square
footage
vacant
for
this
property
upon
review
the
history
of
this
property.
Again,
when
you're
looking
at
the
expenses,
you
know
row
44
or
Row
18
of
this
summary
sheet
over
the
years,
they've
reported
eight
dollars
pretty
consistently.
They
did
show
an
increase
in
2022
of
about
78
cents
again
in
our
test,
we're
at
9.10.
K
So
it's
it's
higher
than
all
the
other
years.
We
did
account
for
what
they've
reported
the
actual
vacancy.
If
you
were
to
equate
that
to
a
percentage
it's
about
11,
whereas
our
guidelines
are
affording
15
for
this
property.
So
even
with
that,
you
know
our
tested,
noi
in
column,
f
is
lower
than
all
four
years.
K
If
you
look
at
column
e,
which
is
the
projected
income,
that
they're
reporting
as
actual
income
without
the
43
627
square
feet
in
rent
vacant
as
they
reported
in
the
rent
roll
or
the
thirty,
two
thousand
six
thirty
three
square
feet
vacant
as
I
reported
after
deducting
for
that
amenity,
space,
they're,
projecting
an
income
of
you
know,
10
point:
you
know
the
I
shouldn't
say
the
number
but
they're
projecting
an
income
higher
than
our
original
assessment
and
higher
than
our
test,
so
we're
at
actually
15
percent
lower.
K
When
you
compare
our
test
versus
what
they
reported
in
2022
as
actual
income,
without
that
vacant
square
footage,
income
included.
If
you
go
back
previous
years
this
this
property
hasn't
appealed
since
2012..
K
You
know,
I
I
can
only
guess
that
you
know
our
income
has
been
much
lower
than
what
they
reported.
So
there
was
really
no
need
this
year.
They
have
a.
They
brought
up
a
case
with
the
cap
rate,
so
I'd
like
to
address
that.
B
K
This
is
our
sales
that
we've
included
in
our
guidelines
and
again
I'd
like
to
reiterate
what
I
did
last
week
where,
when
we
look
at
all
the
sales
in
the
last
few
years,
if
you
average
out
all
the
ratios
that
we've
we've
seen
here,
if
the
board
can
see,
can
you
see
just
find
the
the
screen?
K
So
again,
National
Science
teachers.
This
sale
is
again
for
redevelopment
201
assessment
of
sales
ratio,
1776
Wilson,
we
did
they.
They
did
appeal
this
year
we
did
lower
and
it's
about
95.
The
the
amount
that
was
agreed
upon
is
about
95
of
the
sale
and
they
sign
that
reduction
again.
1300
Wilson
is
57
65
1400
Crystal
three
Boston,
which
you'll
see
in
before
the
board
August
16th.
K
We
did
make
a
a
reduction
to
that
sale
based
on
the
information
that
was
provided
and
that's
about
17
percent
less
than
the
sales
price
is
what
we
reduced
the
the
amount
to
based
on
the
information,
the
new
information
that
we
had
based
on
that
sale.
So
then,
when
we
look
at
the
other
sales,
99
89,
62
percent
for
Sequoia
55
for
Sequoia
3,
Arlington
Tower
at
91
percent,
am
building
at
99.
K
So,
even
though
you
know
these
sales,
if
you
include
a
sales
again,
we're
at
95
assessment
of
sales
ratio
would
would
which
would
point
to
us
lowering
our
cap
rates.
We
didn't
lower
the
cap
rates
again
I'd
like
to
reiterate
that
we
did
increase
concessions
over
the
years.
We
did
take
actual
parking
over
the
years
because
of
the
covet
situation.
K
We
knew
that
you
know
they
the
people
weren't
coming
in,
so
we
took
actual
parking,
which
is
contrary
to
what
we
would
normally
do
is
Project
what
the
parking
would
be
based
on
the
amount
of
spaces
and
and
what
the
market
per
space
is.
We
did
separate
leases
from
leases
in
place
versus
vacant
leases
to
capture
what
the
current
market
would
would
pay
for
this
vacant
spaces.
We
did
increase
tis
over
time
and
we
did
consider
you
know
tenants
leaving.
K
Unfortunately,
in
this
situation,
in
with
this
case,
Amazon
is
not
due
to
leave
until
March
2024.
Lumen,
which
Mr
Harmon
has
has
shown
you
guys
they're
not
scheduled
to
leave
until
September
2026..
So
that's
the
income
that
we
know
that
they'll
be
receiving
year
over
year
until
their
expiration
dates
on
the
which
is
shown
on
the
rent
roll
on
page,
that's
on
page
76
of
123,
if
the
board
wanted
to
refer
to
the
rent
roll
that
was
that
was
showing
for
the
for
the
subject
property.
K
K
You're,
yes,
if
you
exclude
those
sales,
we're
at
74,
74
assessment
and
sales
ratio,
so
historically
ours
are
cap
rates
have
been
low,
but
we
have
been
adjusting
everything
we
could,
even
though
the
sales
suggests
that
we
should
even
lower
the
cap
rate.
So
with
that
I
I
asked
the
board
if
you
have
any
questions,
I'm
open.
Thank
you.
I
Harmon
I'm
Craig
Amazon
is
still
paying
and
looming.
Who
is
going
to
be
subletting
to
somebody?
Hopefully,
if
they're
lucky,
there's
no
pain.
J
That's
correct
now
the
issue
with
that
is,
would
you
capitalize
that
indefinitely
into
the
future,
as
if
they're
going
to
still
pay
knowing
they
vacated,
the
answer
would
be
no,
they
would,
you
would
add
the
excess
income
below
the
line.
A
F
Question
for
the
appellant
you
decided
to
speak
for
I
want
to
mention,
and
you
probably
will
again
I
want
to
make
sure
I
got
it
right.
You
taught
about
increases
in
fed
funds
rates
and
related
offshoot
interest
rates.
What
did
it
you
know
or
well
different
percentages
like
those
dates
between
what
your
beginning
date
and
your
ending.
J
F
All
right
I
want
to
be
real
clear
on
that
one
other
question:
you're
projecting
from
2022
to
from
colony
and
column
G
little
increase
in
vacancy
and,
of
course,
we've
heard
a
lot
about
projected
vacancies,
but
not
in
2023.
F
F
J
And
just
to
clarify
you're
asking
about
operating
expenses,
yeah
I'm,
pretty
expensive.
It
goes
from
so
operating
expenses,
two
reasons
those
will
go
up
from
the
reported
2022
to
the
projected.
So
what
we're
doing
is
we're
projecting
an
85
leased
building
in
order
to
have
85
leased.
That
means
85
percent
of
people
are
occupying
it
presumptively
because
nobody
would
sign
a
lease
not
intended
to
occupy
so
we're
projecting
an
85
occupied
building.
J
Last
year
it
was
22
occupied,
so
the
physical
occupancy
people
using
the
restrooms
using
lights,
that's
going
to
go
up
significantly
at
an
85
percent
stabilized
rate.
Secondly,.
B
J
For
the
first,
yes,
they
will
but
we're
still
we're
projecting
a
stabilized
occupancy
of
85.
This
property
was,
if
we're
projecting
forward
it's
going
to
be
40
vacant
in
the
next
couple
of
years.
Nice
yeah
not
just
gave
this
evaluation
of
April
1st
of
2024..
It's
going
to
have
65
000
square
feet
of
newly's
vacant
space.
So
if
we're.
G
J
K
Thank
you,
you
know
the
Amazon
and
Lumen.
If
they
decide
not
to
release,
I
mean
there's
plenty
of
time
within
between
now
and
2024
or
now
in
2026
to
you
know,
get
a
prospective
tenant
in
the
building.
So
we
don't
know
we
don't
have
a
crystal
ball.
What
might
happen
between
here
and
now
I
mean
here
and
then
what
we
do
know
is
that
you
know
these
tenants
have.
Let
Amazon
has
left
the
building
they're
paying
their
own
expenses
if
I
heard
it
correctly.
K
You
know,
even
in
our
test,
maybe
I
shouldn't
even
test
it,
but
you
know
speak
to
my
Integrity.
This
is
how
we
value
these
properties.
This
is
how
we
afford
the
the
changes
in
the
market.
This
is
how
we
take
the
information
that
we've
received
and
we
do
make
a
reduction
based
on
that
information.
I
do
ask
the
board
to
confirm
the
the
test
value
that
it
shows
a
lower
value,
which
is
represents
a
two
percent
increase
from
last
year's
assessment.
K
And
the
explanation
I've
given
for
those
sales,
thank
you.
J
Yes,
thank
you
a
couple
of
main
points.
First,
being
principle
of
anticipation,
we've
heard
the
Dre's
EA
State
this
many
times
this
year.
We
value
these
properties
based
on
the
principle
of
anticipation.
What
do
we
anticipate
happening
with
this
30
percent
of
nla
that
has
vacated
the
building?
Do
we
anticipate
them
to
continue
paying
rent
indefinitely?
We
do
not.
No
no
potential
purchaser
would
value
it
that
way,
they
wouldn't
be
able
to
get
a
loan
that
way.
Secondly,
market
sales
support
a
higher
cap
rank.
Again.
J
We
use
the
core
packs
that
the
County's
own
expert
we
use
his
methodology
of
surveying,
Market
participants,
participants
and
updating
their
sales
cap
reads:
they
came
up
to
7.7
percent
on
these
five
sales.
Now
those
sales
again
were
95
occupied
had
a
Walt
of
seven
years.
This
property
is
going
to
be
40
vacant.
It
has
a
Walt
of
only
3.3
years
as
of
the
data
value
as
such,
the
Capri
needs
to
reflect
this
and
the
operating
expenses
need
to
reflect
a
stabilized
occupied
property.
Thank
you.
A
Madam
chairwoman
is
there
any
time
left
because
I'd
like
to
add
a
point?
Actually
the
timer
just
went
off.
So
no
there's
not
thank
you.
Okay,
it's
just
among
the
board
members.
H
I
mean
I
was
okay
with
Rob's
test,
but
I
think
the
cap
rate's
still
off
a
little
bit,
not
as
much
as
some
of
the
other
cases.
So
I
was
I
was
looking
at
it
as
a
seven
and
a
half
cap
rate,
this
property.
Why?
Because
it's
it's
a.
E
H
One
of
the
nicest
obstacles
in
Arlington
so
I
don't
think
it
gets
above
an
a
cat,
but
it's
got
some
just
as
far
as
the
office
Market
in
general,
so
I,
don't
I,
don't
see
the
6.9
with
taxes
effectively.
H
5.8
cap
rate
on
office
is
being
realistic
in
any
way
so
I
just
I,
think
seven
and
a
half
is
kind
of
looking
at
values
for
things
that
about
380
a
square
foot.
F
A
lot
before
we
had
sessions
thought
a
lot
about
the
changing
Dynamics,
particularly
in
Office
Buildings,
where
people
are
learning
to
not
come
to
the
office
to
go
to
work
and
but
but
so
to
be
fewer
people
using
elevators,
especially
toilets
and
whatnot,
but
it
would
take
time
for
those
leases
to
expire
D.
So
you
know,
operating
expenses
can
go
down
faster
than
than
income
would
go
down,
I
think
we're
still
in
a
transition
year.
It
hasn't
been
fully.
This
is
all
covered,
related
I.
Don't
think
this
is
the
test
here.
F
Next
year
will
know
a
lot
more
I
I
tend
to
go
with
sales
values
at
the
county
objectively
gathers
and.
I
F
Don't
that
doesn't
sway
me
when
they
say
I'm,
sure
you're
trying
to
be
honest
and
of
all
sense,
but
it
doesn't
screaming
the
other
one
is
that's:
comparing
Sequoia
and
a
Boston
area,
nice
high-rise
for
apples
and
oranges,
different
locations,
different
ages,
different
amenities
right!
Well,
it's
quite.
There
are
no
communities.
F
B
B
The
way
lenders
are
demanding
a
greater
percent
investment
and
lenders
are
looking
at
Lisa's,
the
Amazon
with
I.
Guess
it's
Amazon
something
else:
they're
not
assuming
they
don't
get
rebranded
they're,
assuming
it's
empty
space,
but.
I
I
think
these
are
issues
that
we're
going
to
face
next
year
and
we're
going
to
see
where
the
covet
really
works
its
way
through
or
the
the
occupancy
of
each
each
their
employees
I
mean
this
is
they're
still
collecting
this
I.
F
B
And
you
know
what
I
get
is
I
did
something
slightly
different
I
took
the
expense
of
the
of
the
applicant
ended
up
at
119,
867,
300.
I,
don't
know
I
I,
don't
I,
don't
sense
that
we
have
four
votes
for
the
change
in
the
camera.
F
And
I
say:
last
week
we
had
an
argument
not
in
our
discussion
a
good
professional
discussion
on
capric
changes
and
I'd
set
up
in
peace.
The
calculates
the
cap
rate
and
I
thought
a
lot
about
it
over
the
week
that
in
extraordinary
cases-
and
there
was
one
last
week
we
did
change,
I
did
I
didn't
vote
for
it,
but
I
I
can
see
that
we've
got
to
be
that
flexible.
This
is
not
an
extraordinary.
G
F
G
So
until
my
first
reaction
was,
you
know,
why
is
saying
why
wasn't
there
human
test
here,
the
all
the
numbers,
the.
G
Assessment
Luke,
why?
But
yeah
I'm
looking
at
the
expenses
I
did
increase
a
little
bit
not
as
far
as
Barnes
that
went
up
to
nine
I
didn't
do
tests
actually
nine
two
five
ten
dollars
more
than
ten
dollars
kind
of
like
the
middle
I'm,
just
a
2.975
on
the
experiences
final
body
counts
to
123
636.
B
A
A
Thanks
that
completes
the
agenda
and
just
before
the
appellants
and
the
assessors
get
off
just
there's
a
suggest:
I
meant
to
bring
this
up
at
the
beginning
of
the
hearing,
because
you
guys
can't
all
hear
the
timer
go
off.
I
know:
everybody's
got
cell
phones
because
I
see
the
cell
phones
in
a
lot
of
the
videos.
So
if
you
could
set
a
timer
next
to
you,
so
you
would
know
when
it's,
because
it
seems
disruptive
to
me
to
say:
okay,
your
time's
up.
A
You
got
to
wrap
it
up
and
when
I
mean
wrapped
up,
I
mean
wrap
it
up
in
20
seconds,
and
sometimes
people
go
on
for
another
minute
or
so
so
you
can
kind
of
keep
your
phone
next
to
you.
So
you
can
kind
of
watch
the
minutes.
That
would
be
probably
the
best
way.
It
just
makes
me
look
better
on
the
screen.
F
A
Anyway,
so,
okay,
that
completes
the
agenda
any
other
business.
E
I
just
want
to
bring
up
scheduling
for
the
15th.
You
guys
have
seen
I
think
you've
seen
a
schedule
for
the
16th,
but
we
we're
going
to
add
cases
to
the
15th
as
well.
We
are
having
cases
drop
out
last
minute
and
we're
seeing
last
minute
withdrawals
just
like
today.
E
You
know
which
is
difficult
to
keep
a
full
case
load
whenever
that's
happening,
but
we're
trying
our
best
to
fill
these
out
so
right
now,
I
think
we
have
one
day
next
week
we're
on
the
ninth,
but
we
are
going
to
try
to
fill
the
the
schedule
out
from
the
15th
to
16th
on
so
just
to
make
everybody
aware.