Minnesota Supreme Court Affirms Tax Court’s Property Tax Valuation of Medical Office Building

The Minnesota Supreme Court affirmed the Tax Court’s valuation of a three-story medical office building. The taxpayer argued that the tax court was wrong for using market rent rather than effective net rent to calculate the building’s potential gross income under the income capitalization approach. The Supreme Court, affirming the Tax Court’s decision, stated that there is no evidence that the building’s tenant improvement allowances or rent concessions were excessive or atypical for the market. The Supreme Court also held that the tax court did not err in rejecting the taxpayer’s proposed occupancy adjustment under the sales comparison approach, questioning ...