Case Study
Multifamily Valuation: When Income Wears the Clothes of Equity
A $3.63M reduction on a downtown Fort Worth multifamily asset. How income-driven equal & uniform analysis exposed the gap between what the CAD modeled and how investors actually price larger-unit product.
Quick Insights
- Property
- Downtown Fort Worth multifamily, ~1,300 SF avg unit size
- 2025 Notice Value
- $15,181,056 ($274.62 PSF)
- CAD's Settlement Offer
- $12,360,000
- Champions Result
- $11,550,000 settlement
- Reduction from Notice
- $3,631,056 (23.9%)
- Strategy
- Income-driven PPSF equity analysis using certified roll data
The Property
The property is a downtown Fort Worth multifamily asset with an average unit size near 1,300 square feet. That is larger than many of the CAD-selected competitors based on neighborhood boundaries. The 2025 notice value came in at $15,181,056—$274.62 per square foot—which was 4.70 percent above its recent $14.5 million acquisition price.
On the market value lane, the CAD had a defensible position. The sale supported $14.5 million. But Texas law also requires equity, and this is where I identified a pressure point.
The Industry Approach — And Why I Rejected It
The first pass through the industry's standard equity software produced exactly what those tools always produce: a grid full of automated adjustments, improvement-only PSF comparisons, and a valuation range that looked technical but had nothing to do with how income-driven multifamily assets are priced. It was technically elaborate but structurally wrong for the problem in front of us.
I didn't refine it. I tossed it.
I rebuilt the valuation from the ground up using appraisal fundamentals:
- ▶Total PPSF (price per square foot)
- ▶Income behavior
- ▶Uniform normalization
- ▶Certified roll data only
No adjustments. No templates. No software logic. Just economics. That was the version the CAD saw.
Operator Logic
Standard equity software is built for volume, not precision. When the tool's logic doesn't match how the asset class is priced, the output is just noise with formatting. Operators should ask their consultant one question: did you build this valuation around how buyers actually price this asset, or did you run software?
The CAD's Response
A short time later, the CAD appraiser responded with familiar objections:
“Not comparable. Smaller units.”
“Not comparable. Different size.”
“Not comparable. Different unit mix.”
“Not comparable. Partially complete.”
And paired with that pushback came the district's number: $12,360,000.
Both the attorney and a typical consultant would see that as a good offer. It was below the notice, below the sale, and an easy win to present to the owner. From a distance, it looks that way.
Why I Didn't Stop
The economics didn't support stopping there. The subject sat at $274.62 per square foot while the median of the peer set was roughly $182. Even with the CAD's offer to move the value down, the relationship was still too far out of alignment. The equity variance remained too large for the offer to be economically defensible.
The offer reduced the exposure. It didn't resolve the pressure point.
So I responded directly to the CAD's critique. Not with new comps or a new grid, but with the actual market drivers behind the size issue:
- ▶Larger units produce less revenue per square foot
- ▶Rent does not scale linearly with size
- ▶Buyers apply lower PPSF pricing to larger-unit product
The CAD's own objection—that smaller units carry higher PPSF—wasn't a reason to dismiss the comps. It was exactly what the market would expect. That was the insight. That was the turn.
Operator Logic
When the CAD says “not comparable,” most consultants look for new comps. The right move is sometimes to explain why the difference proves your point. The CAD's objection here was the market signal, not a weakness in the evidence.
The Settlement
The attorney carried that back to the district. After reviewing the economics and the size-driven logic, the CAD did not repeat their earlier objections. They came back with a revised offer, and we settled at $11,550,000.
Not because of theatrics. Not because of pressure. Because the valuation was built on how investors price multifamily assets, and the rebuttal addressed the economics behind the CAD's pushback rather than the surface-level critique.
Valuation Trajectory
| Stage | Value | PSF | vs. Notice |
|---|---|---|---|
| 2025 Notice | $15,181,056 | $274.62 | Baseline |
| Recent Acquisition | $14,500,000 | ~$262 | -$681,056 |
| CAD's Offer | $12,360,000 | ~$224 | -$2,821,056 |
| Peer Set Median | — | ~$182 | Equity benchmark |
| Final Settlement | $11,550,000 | ~$209 | -$3,631,056 |
This case landed where it did because the valuation was built the way investors think, and the rebuttal answered the economics driving the CAD's position.
Operator Takeaway
Most owners assume all consultants do the same thing and end up with roughly the same results. File the protest, run the software, present the comps, achieve a reduction. From the outside, it looks like a commodity service with commodity outcomes.
That perception is wrong.
When I transitioned from fee appraisal into property tax work, the licensing requirement was a 30-hour course with no test. Three or four days of instruction, and you were suddenly “qualified” to challenge valuations built by a completely different profession. That is the structural gap most operators never see.
The Hub & Spoke Principle
The consultant is the only role that should stay connected to every part of the case. Everyone else touches the case in segments. The CAD appraiser sees one lane. The attorney sees another. The owner sees the outcome. The statute sits in the background. The economics sit underneath everything. The consultant is the only one who sees all of it at the same time.
That makes the consultant the hub of a multi-spoke wheel. The spokes are the attorney, the CAD appraiser, the owner, the evidence, the statute, and the economics. The wheel only works if the hub can carry the load.
A weak hub lets the wheel wobble—and your taxes stay high. A strong hub keeps the system aligned—and your NOI protected.
For operators, the lesson is simple. Your consultant is the most important part of the system. The entire process only works when the person in that role understands every lane, every lever, and every spoke in the wheel.
Frequently Asked Questions
What is equal & uniform valuation in Texas property tax?
Equal and uniform is a constitutional protection in Texas (Article VIII, §1(a)) that requires properties to be taxed proportionally to their value. Under Tax Code §42.26, if a property's assessment is higher than comparable properties in the district, the owner can challenge the valuation on equity grounds—even if the market value itself may be supportable. This is separate from market value and provides an independent lane for reducing assessed value.
Why does unit size matter in multifamily property tax valuation?
In multifamily assets, larger units generate less revenue per square foot than smaller units because rent does not scale linearly with size. A 1,300 SF unit doesn't rent for double a 650 SF unit. This means buyers apply lower price-per-square-foot (PPSF) pricing to larger-unit product. When a CAD compares a large-unit asset to smaller-unit competitors without accounting for this income dynamic, it systematically inflates the subject's assessed value.
What qualifications should a commercial property tax consultant have?
In Texas, becoming a property tax consultant requires only a 30-hour course with no exam. That is a very low bar for a role that involves challenging valuations built by licensed appraisers. Operators should look for consultants with actual appraisal credentials—such as a Texas Certified General Appraiser license—who understand valuation methodology, can develop independent cost or income approaches, and can engage with CAD appraisers on technical grounds rather than simply running software-generated comparisons.
How is PPSF (price per square foot) used in multifamily equity analysis?
PPSF—total price per square foot—is one of the primary metrics investors use to compare multifamily assets. In an equal & uniform analysis, the consultant compares the subject property's PPSF against comparable properties on the district's certified roll. If the subject is assessed significantly above the median of its peer set, that disparity supports an equity-based reduction. The key is using total PPSF (not improvement-only) and normalizing for income behavior, which standard equity software often fails to do.