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Many people have said that real estate valuation is an “art,” not a “science.” It is reasonable to believe that five appraisers would offer five different opinions of value. That is most certainly the “art” portion, as everyone has an opinion when it comes to art. However, crafting an appraisal is not art. In fact, appraisal work truly is science: It has protocol, it is formulaic and it is not without process. Moreover, the design of any given valuation is embedded in a foundation that depends on thoughtful construction.
It is unfortunate that the Supreme Court of Iowa failed to recognize this in Wellmark, Inc. v. Polk Cnty. Bd. of Review.
In Iowa, “Actual Value” means “the fair and reasonable market value of such property.” “Market Value” means “…the fair and reasonable exchange in the year in which the property is listed and valued between a willing buyer and willing seller, neither being under an compulsion to buy or sell and each being familiar with the facts relating to a particular property.”
… Actual Value is, in fact, Market Value which necessarily means value-in-exchange. Moreover, market value is predicated on highest and best use. This puts the question of “Single Tenant v. Multi-tenant” into a different light. In other words, while the question before the court within the context of single versus multi-tenant is the correct question, the analysis is not necessarily case law driven, but market data driven.
However, the court instead focused on the merits of Use Value based on case law out of jurisdictions marginally persuasive in Iowa. In addition, the court assigned the greatest weight to an Iowa case, decided based on a statutory definition of actual value that subsequently changed in 1959, and again in 1967.
The favored valuation approach is the sales comparison approach. Adjustments can be made for location, size, design, and other physical characteristics. The analysis, in other words, takes its direction from the market and the data that is available.
This data, in its most simple form, represents the prudent office building buyer in the Des Moines area at the time of the assessment, January 1, 2011. This is Market Value In Exchange, which is the cornerstone of the Iowa property tax statutes. It is the kind of data from which Actual Value can be derived.
Appraisers may consider the foregoing data in a particular market for a particular property category. There are many other factors that an appraiser must consider, but certainly the raw data represent an important element. The fact that there are data is an important consideration as well. The court, however, concluded that no market data applied, implying that market value is impossible to derive...
* Joseph J. Calvanico, MAI, FRICS has nearly 40 years of experience in real and personal property tax and valuation with several major accounting services firms, completing valuations in over 40 states and 10 countries. Mr. Calvanico is a graduate of the University of Wisconsin and The John Marshall Law School.Mr. Calvanico is an Accredited Senior Appraiser and Member of the Royal Institution of Chartered Surveyors. Mr. Calvanico also holds the Certified Member of the Institute (CMI) designation of the Institute for Professionals in Taxation (IPT).
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"I''m Not Feeling Too 'Wellmark'": Doubts Shroud Valuation Holding
 875 N.W. 2d 667 (Iowa 2016)
 Iowa Code § 441.21(b)
 Iowa Code § 441.21(b)
 Bankers Life Co. v. Zirbel, 239 Iowa 275 (Iowa 1948)
 See “Valuation of Corporate Campuses,” by Michael J. Kelly (MAI, SRPA) and Elizabeth Gracie (Partner, O’Keefe, Lyons & Hynes, LLC), Institute for Professionals in Taxation Property Tax Symposium, November 2016.