Commercial Property (also called investment or income property) refers to buildings or land intended to generate a profit, either from capital gain or rental income. Commercial Property includes office buildings, industrial property (including but not limited to, electronic/high tech, wood/paper, food processing, primary and secondary metals, chemical, plastic, printing etc.), malls, retail stores, farm land, multifamily housing buildings, warehouses, land (including investment properties on undeveloped, raw, rural land in the path of future development. Or, infill land with an urban area, pad sites, and more), garages, and miscellaneous properties (including any other nonresidential properties such as hotel, hospitality, medical centers, and self‐storage developments etc.).

Industrial Property refers to properties which have an improvement value of more than $1,000,000.  The Department of Revenue has the responsibility for the appraisal and valuation of all industrial properties in the state of Oregon over $1,000,000. http://www.oregon.gov/DOR/programs/property/Pages/
industrial.aspx

Application for Correction of Maximum Assessed Value Due to Error in Square Footage - ORS 311.234

Application for Proration of Property Taxes Due to Damage by Fire Act of God - ORS 308.425 and Application for Reassessment of Values Due to Fire or Act of God - ORS 308.428

Application for Reduction of Maximum Assessed Value of Demolished or Removed Buildings - ORS 308.146 (8)

Application for Reassessment of Destroyed or Damaged Property – ORS 308.146(6)

How is Commercial Property Appraised?
A.  The Assessor’s Office applies three approaches or three separate indications of value when determining commercial market value; cost approach, sales or market approach and income approach.  These values are reconciled to arrive at a final value conclusion.

Cost Approach – the value of the land is determined first, then replacement cost of the buildings or improvements are added.  Accrued depreciation is subtracted and the result is added to the land value.

Market Approach – sales of similar properties are analyzed to derive units of comparison such as price paid per square foot, or per rental unit, or per $1,000 of gross income.  These are applied to the subject property to arrive at an indicated value.

Income Approach – based on the concept that the value of income producing property is directly related to the level of income which can be expected over their economic life.  The economic rent for the property is estimated and expenses are deducted to derive an annual net income figure.  Net operating income is converted to a value estimate by dividing the net income by a capitalization rate.  This rate is derived by comparing net income by sales prices of comparable properties.  This rate is then applied to the net income of the subject property to yield a value estimate.

Seldom do three approaches generate the same value.  The final step is to reconcile the values developed under the three approaches.  The relative merit of each value indication is considered and the values correlated to arrive at a final value determination.