STEINMETZ, J.
This is a review of a decision of the court of appeals affirming the order of the trial court.1 The question before the court is whether the City of Manitowoc Board of Appeals (the board) erred by affirming a property tax assessment based on "market” rental income when there was a recent arms-length sale of the property from which to determine fair market value. We conclude that an arms-length sale price is the best indicator to determine fair market value for property tax purposes and an approach that considers factors extrinsic to the arms-length sale is not statutorily correct and therefore in error as a matter of law.
All the stock of Darcel, Inc. was sold on August 10,1983, for $4,100,000. The only asset of Darcel, Inc. was the Mid-Cities Mall. On January 1, 1984, the city of Manitowoc assessed the fair market value of the mall at $5,231,000 for the 1984 tax year. This assessment was based in part on what the assessor determined to be the fair market value of the store rental property. According to the city assessor, the market value was much greater than contract value of many [625]*625of the leases because certain leases were long-term leases entered into in 1968 at the fair market value at that time.
Darcel, Inc. (the new owners) filed a written objection to the assessment pursuant to sec. 70.47(7), Stats., following which the Board of Review convened, took evidence, and sustained the assessor’s estimates by a vote of four to three. Darcel then petitioned the Manitowoc county circuit court for a writ of certiorari. The writ was granted by the Honorable Fred H. Hazelwood, who remanded the case to the board for further consideration. Judge Hazelwood held that the board ignored the competent evidence of an arms-length sale, and the board’s conclusion was not supported by any evidence in the record.
The board appealed the trial court’s decision to the court of appeals which affirmed the trial court. The court of appeals, after determining that the board would be in error as a matter of law if it considered extrinsic factors in the presence of an arms-length sale, determined that the sale of the Mid-Cities Mall was indeed an arms-length transaction. Darcel, 128 Wis. 2d at 214. The board petitioned for review of that decision to this court.
This court stated the standard of review which applies for certiorari appeal from boards of review in State ex rel. Boostrom v. Board of Review, 42 Wis. 2d 149, 155, 166 N.W.2d 184, 187-88 (1969):
"'The principles of law are well settled governing the jurisdiction of courts in reviewing the findings of boards of review on certiorari. The duties of boards of review are gwosi-judicial and courts have no jurisdiction to disturb their findings or determinations except where they act in bad faith or exceed their jurisdiction. Judicial review of [626]*626the action of boards of review on certiorari extends only to jurisdictional errors. If the board of review does not act arbitrarily or dishonestly and the evidence presented before it is sufficient to furnish any substantial basis for the valuation found by the board, its decision will not be disturbed. The review here extends only to the correction of jurisdictional errors and does not include mere errors of judgment as to the preponderance of evidence. Upon certiorari to a non-judicial body such as a board of review, the court will review the evidence only so far as to ascertain if there is reasonable ground for belief that the decision is the result of honest judgment, in which case it will not be disturbed. This court will review the proceedings to ascertain whether such body has kept within its jurisdiction and whether such board acted upon competent evidence sufficient to give it jurisdiction. The presumptions are all in favor of the rightful action of the board. The assessor’s valuation of the property is prima facie correct and is binding upon the board of review in the absence of evidence showing it to be incorrect.’ ” (Citations omitted.) Quoting from State ex rel. Pierce v. Jodon, 182 Wis. 645, 647-48, 197 N.W. 189 (1924).
These standards were summarized in State ex. rel. Mitchell Aero v. Bd. of Review, 74 Wis. 2d 268, 281-82, 246 N.W.2d 521 (1976):
"[0]n a review such as this only the following factors may be considered: (1) Whether the board kept within its jurisdiction; (2) whether it acted according to law; (3) whether its action was arbitrary, oppressive or unreasonable and represented its will and not its judgment; and (4) whether the evidence was such that it might reasonably make the order or determination in question.”
[627]*627The board argues that, because the long-term leases on this property were several dollars per square foot below the "going rate” for mall rental space in similar malls, the recent sale price was not the "full value which could ordinarily be obtained therefor at private sale.”2 (Emphasis added.) The board contends that, although the buyer purchased all the rights the seller possessed to sell in an arms-length transaction, the leaseholder owned valuable rights that were not included in the sale price. Some long-term leases were generating only $1.09 per square foot rent while other space inside the mall and in other malls generated between $6 to $10 per square foot. Indeed, one long-term tenant renting space for $1.09 per square foot was subletting the space for $5.75 a square foot. Thus, the presence of the long-term leases artificially lowered the sale price to less than "full value.” The board asserts the only way the assessor could determine "full value” was to use the income approach and use a fair market rent to determine property value.3 While [628]*628the board admits that the sales transaction was arms-length, it insists that not all of the "bundle of rights” that make up the property were transferred to the new owners because some of the value of the rights was retained by the long-term tenants. However, these were rights of the tenants, not the seller-owner.
The mall owners argue that they did buy all the "bundle of rights” that comprised the property. They purchased the land the buildings stood on, the physical plant, the right to the rental income through the leases, and the reversions when the leases expired. Since the mall owners had to bear the burden of honoring the leases that did not generate market rent, they must have purchased all the contractual rights accompanying such a lease.
It is immaterial that the lease was a detriment to the property; it was transferred to the new mall owners, and its value was reflected in the sales price of the property. Thus, the sale was an arms-length transaction and clearly the best evidence of the "full value” of the property.
Fair market value or full value of property is consistently defined as: "[T]he amount it will sell for upon arms-length negotiation in the open market, between an owner willing but not obliged to sell, and a buyer willing but not obliged to buy.” State ex rel. Mitchell Aero, 74 Wis. 2d at 277.
The Property Assessment Manual for Wisconsin Assessors, Yol. I, page 7-3 (Revised 12/82) states the [629]
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STEINMETZ, J.
This is a review of a decision of the court of appeals affirming the order of the trial court.1 The question before the court is whether the City of Manitowoc Board of Appeals (the board) erred by affirming a property tax assessment based on "market” rental income when there was a recent arms-length sale of the property from which to determine fair market value. We conclude that an arms-length sale price is the best indicator to determine fair market value for property tax purposes and an approach that considers factors extrinsic to the arms-length sale is not statutorily correct and therefore in error as a matter of law.
All the stock of Darcel, Inc. was sold on August 10,1983, for $4,100,000. The only asset of Darcel, Inc. was the Mid-Cities Mall. On January 1, 1984, the city of Manitowoc assessed the fair market value of the mall at $5,231,000 for the 1984 tax year. This assessment was based in part on what the assessor determined to be the fair market value of the store rental property. According to the city assessor, the market value was much greater than contract value of many [625]*625of the leases because certain leases were long-term leases entered into in 1968 at the fair market value at that time.
Darcel, Inc. (the new owners) filed a written objection to the assessment pursuant to sec. 70.47(7), Stats., following which the Board of Review convened, took evidence, and sustained the assessor’s estimates by a vote of four to three. Darcel then petitioned the Manitowoc county circuit court for a writ of certiorari. The writ was granted by the Honorable Fred H. Hazelwood, who remanded the case to the board for further consideration. Judge Hazelwood held that the board ignored the competent evidence of an arms-length sale, and the board’s conclusion was not supported by any evidence in the record.
The board appealed the trial court’s decision to the court of appeals which affirmed the trial court. The court of appeals, after determining that the board would be in error as a matter of law if it considered extrinsic factors in the presence of an arms-length sale, determined that the sale of the Mid-Cities Mall was indeed an arms-length transaction. Darcel, 128 Wis. 2d at 214. The board petitioned for review of that decision to this court.
This court stated the standard of review which applies for certiorari appeal from boards of review in State ex rel. Boostrom v. Board of Review, 42 Wis. 2d 149, 155, 166 N.W.2d 184, 187-88 (1969):
"'The principles of law are well settled governing the jurisdiction of courts in reviewing the findings of boards of review on certiorari. The duties of boards of review are gwosi-judicial and courts have no jurisdiction to disturb their findings or determinations except where they act in bad faith or exceed their jurisdiction. Judicial review of [626]*626the action of boards of review on certiorari extends only to jurisdictional errors. If the board of review does not act arbitrarily or dishonestly and the evidence presented before it is sufficient to furnish any substantial basis for the valuation found by the board, its decision will not be disturbed. The review here extends only to the correction of jurisdictional errors and does not include mere errors of judgment as to the preponderance of evidence. Upon certiorari to a non-judicial body such as a board of review, the court will review the evidence only so far as to ascertain if there is reasonable ground for belief that the decision is the result of honest judgment, in which case it will not be disturbed. This court will review the proceedings to ascertain whether such body has kept within its jurisdiction and whether such board acted upon competent evidence sufficient to give it jurisdiction. The presumptions are all in favor of the rightful action of the board. The assessor’s valuation of the property is prima facie correct and is binding upon the board of review in the absence of evidence showing it to be incorrect.’ ” (Citations omitted.) Quoting from State ex rel. Pierce v. Jodon, 182 Wis. 645, 647-48, 197 N.W. 189 (1924).
These standards were summarized in State ex. rel. Mitchell Aero v. Bd. of Review, 74 Wis. 2d 268, 281-82, 246 N.W.2d 521 (1976):
"[0]n a review such as this only the following factors may be considered: (1) Whether the board kept within its jurisdiction; (2) whether it acted according to law; (3) whether its action was arbitrary, oppressive or unreasonable and represented its will and not its judgment; and (4) whether the evidence was such that it might reasonably make the order or determination in question.”
[627]*627The board argues that, because the long-term leases on this property were several dollars per square foot below the "going rate” for mall rental space in similar malls, the recent sale price was not the "full value which could ordinarily be obtained therefor at private sale.”2 (Emphasis added.) The board contends that, although the buyer purchased all the rights the seller possessed to sell in an arms-length transaction, the leaseholder owned valuable rights that were not included in the sale price. Some long-term leases were generating only $1.09 per square foot rent while other space inside the mall and in other malls generated between $6 to $10 per square foot. Indeed, one long-term tenant renting space for $1.09 per square foot was subletting the space for $5.75 a square foot. Thus, the presence of the long-term leases artificially lowered the sale price to less than "full value.” The board asserts the only way the assessor could determine "full value” was to use the income approach and use a fair market rent to determine property value.3 While [628]*628the board admits that the sales transaction was arms-length, it insists that not all of the "bundle of rights” that make up the property were transferred to the new owners because some of the value of the rights was retained by the long-term tenants. However, these were rights of the tenants, not the seller-owner.
The mall owners argue that they did buy all the "bundle of rights” that comprised the property. They purchased the land the buildings stood on, the physical plant, the right to the rental income through the leases, and the reversions when the leases expired. Since the mall owners had to bear the burden of honoring the leases that did not generate market rent, they must have purchased all the contractual rights accompanying such a lease.
It is immaterial that the lease was a detriment to the property; it was transferred to the new mall owners, and its value was reflected in the sales price of the property. Thus, the sale was an arms-length transaction and clearly the best evidence of the "full value” of the property.
Fair market value or full value of property is consistently defined as: "[T]he amount it will sell for upon arms-length negotiation in the open market, between an owner willing but not obliged to sell, and a buyer willing but not obliged to buy.” State ex rel. Mitchell Aero, 74 Wis. 2d at 277.
The Property Assessment Manual for Wisconsin Assessors, Yol. I, page 7-3 (Revised 12/82) states the [629]*629conditions necessary for a sale to be considered a "market value” transaction:
"1. It must have been exposed to the open market for a period of time typical of the turnover time for the type of property involved.
"2. It presumes that both buyer and seller are knowledgeable about the real estate market.
"3. It presumes buyer and seller are knowledgeable about the uses, present and potential, of the property.
"4. It requires a willing buyer and a willing seller, with neither party compelled to act.
"5. Payment for the property is in cash, or typical of normal financing and payment arrangements prevalent in the market for the type of property involved.”
Although the board contested the satisfaction of these conditions in the lower courts, it concedes here that the sale of the Mid-Cities Mall was an arms-length transaction, at least as to the rights sold in that transaction. This court has previously held that it is error for an assessor to use other means to assess the value of property in the presence of an arms-length sale. State ex rel. Geipel v. Milwaukee, 68 Wis. 2d 726, 737, 229 N.W.2d 585 (1975). However, this assessor did have a duty to determine if the sale was at arms-length and properly investigated further. While his investigation uncovered some "red flags” that could have indicated an other-than-arms-length sale, these "red flags” were later explained to the satisfaction of the circuit court, and did not appear to be the basis of the board’s findings.4
[630]*630The mere claim of an arms-length sales should not foreclose the assessor from further investigation to determine the nature of the sale. Only through investigation and comparison can an assessor determine if the sale is truly at arms-length. From the record it appears that the Manitowoc city assessor entered his comparative study of shopping malls with just such an investigation in mind. However, such an investigation should only be given credence if it produces the "best information” possible, and better information than a facially arms-length sale. Because of the nature of shopping malls5 and like property that are unique in nature, a sale that meets the arms-length qualifications stated previously will represent the full value of the property. Any comparative information about other shopping malls would be, at best, speculative, and at worst, totally subjective.6 Information that would suggest that the mall was not [631]*631being used to the highest and best use speculates about the ability of the owners to rent the property. While this may not be true of all property with leases, the sale price should be conclusive of market price unless there is evidence that the leases themselves were not entered into at arms-length and in good faith. Sale-leaseback situations, for instance, may be undertaken with terms to avoid property tax and might not be entered at arms-length.
Since the board initially asserts that not all the property rights were transferred, it is necessary to determine what those property rights were before the sale. First, the prior owner had fee simple of all the actual real estate, including the mall area and parking areas. It is clear that the areas in fee simple were purchased in an arms-length sale.
Second, the prior owner had leased certain areas of the property. By doing so, the right of occupation of the leasehold was contracted away for a right to a certain amount of rent. In addition, the prior owner retained the reversion of the leasehold estate. It is clear that the new owner received: 1) the same right to collect rent that the prior owner had retained as a result of entering the lease agreements, and 2) the reversion of the leasehold estate. This, too, was part of an arms-length transaction.
Third, all other encumbrances (such as easements) that might have been present on the property were transferred. These are not at issue in the present action.
From this analysis, it is clear that all of the "bundle of rights” that made up the property were transferred in this sale. The new owners received exactly those rights possessed by the former owners.
[632]*632The board’s complaint, however, is that the prior owners did not own the "full value” of the tenant’s leasehold. By operation of the rental marketplace, like the marketplace for real estate itself, the value of the tenant’s leasehold has increased independent of the contract itself. This increased value is evidenced by the difference between the rent specified by the long-term lease and "market” rental. Since the prior owners never "owned” this increased value, the prior owners could not transfer this value to the new owners, even though all the rights that made up the property were transferred. Although the rights themselves were transferred, some of the value of the rights were not transferred. Therefore, the argument is the price paid by the new owners to the prior owners did not reflect the true value of all the rights in the property.
The city assessor based his conclusion that not all the rights were being sold or that not all the value was being conveyed on his survey of eleven shopping malls over the state of Wisconsin and their sales prices in recent years. From this, the assessor derived a weighted average rental value per square foot. This, he concluded, was the "market price” of mall rental space that could be applied to the Mid-Cities Mall.
We find this analysis not acceptable. The assessor’s "value” theory is entirely dependent on what comparable market rates are for rent. However, what the parties contracted for was a leasehold, not just a month-to-month tenancy, but a long-term lease with terms and conditions that made it unique when compared N other kinds of leases. When an assessor judges the value of real estate without a recent sale, he often looks at "comparable sales” — "properties that are similar to the subject property in age, [633]*633condition, use, type of construction, location, number of stories, and physical features.7 The more similar the [634]*634sold property is to the subject, the more valid is the sale price as an indicator of the value of the subject property.”8
When an assessor is assessing the value of leaseholds, he is not justified in simply comparing the "bottom line,” that is, what is the rent charged on the leases. If the assessor wishes to establish comparable leaseholds, he must examine other elements about the lease: the location of the rental property within a mall, whether the lease was for an "anchor” store or for a smaller store within the mall, the type and age of the mall that the leasehold is in, relative vacancies in the malls, and the length and terms of the lease that created the leasehold. If the assessor finds that the [635]*635rental rate per square foot is not substantially lower than other leases that were contracted in the same historical period, his inquiry is at an end. If the lease price per square foot is historically justified, the sale price of the real estate is the best information about full value of the property for tax purposes.
However, there is no evidence whatsoever that the long-term leases in the Mid-Cities Mall were not entered into at arms-length or were below market value for long-term leases of that type. The city attorney, appearing for the board, admitted at oral argument that there was no evidence that the long-term leases were not entered into at arms-length or were below market value at the time of their inception. The leases in the Mid-Cities Mall that are allegedly below market leases were entered into in 1968 for a period of fifteen years with options. If the leases were entered into at arms-length when drafted, sale of the leases represented the full value of the leasehold. Since both the full value of the leasehold interests and the prior owner’s interests were sold to the new owners of the Mid-Cities Mall, all the interests in the property were transferred. The price for these interests was the price paid at the arms-length sale, $4,100,000. That price represents the best information about the full market value of the property because it is the full market value of the property.9
[636]*636If an encumbrance on the subject land would equally subject all potential buyers to the same decreased use or rent of the property, and the encumbrance was entered into at arms-length for a fair market price at the time it was entered, it should be considered to lower the full market price of the property. This means that any current market value of the encumbrance should not be allowed to distinguish an otherwise arms-length sale of the property itself, and the presence of such an encumbrance should be considered when assessing the full market value of the encumbered land.
We are not convinced by the precedent that the board cites from other jurisdictions that this approach is incorrect.10 In most of the cases cited, the courts did [637]*637not have the advantage of considering an otherwise arms-length sale when considering the assessment. In these cases, the taxpayer, by introducing evidence of lower-than-market rents, attempted to distinguish the estimate of true market value, based on market rents rather than contract rents. In other words, the taxpayer attempted to supplant one estimate with another estimate. In the current case, the assessor attempted to supplant the actual arms-length sale price with an estimate based on non-comparable property. While the principles involved may be the same, the injustice of taxing the current market value of the leasehold is most clearly demonstrated when a sale has occurred.
In two cases cited a recent sale had occurred. In Pepsi-Cola Bottling Co. v. Bd. of Assessors, 397 Mass. 447, 491 N.E.2d 1071 (1986) Pepsi had built the original building in 1957 and sold it under a "leaseback” arrangement. Under the terms of this leaseback, Pepsi was to pay the "owner” of the property $1.44 per square foot during the duration of the long-term lease period, but Pepsi retained the option to renew the lease at 63^ per square foot. Additionally, Pepsi was to pay all property taxes and assessments, all fire and liability insurance premiums, all utility charges, ordinary and structural repairs and maintenance. Pepsi leased and occupied the entire property and improvements.
The regular term of the lease expired in December, 1982, and Pepsi exercised its option and began [638]*638paying 63^ per square foot rent. In February, 1983, the property was sold in an otherwise arms-length transaction for $310,000. The assessment board found comparable properties under lease for $2.80 to $3 and applied the $2.80 rate to the Pepsi property.
While the Pepsi court approved using market rates because the tenant’s rights were not "valued” in the sale, the Pepsi sale can be distinguished from the sale of the Mid-Cities Mall and the leases therein. In Pepsi, whether the original lease was at arms-length is questionable because of the sale-leaseback agreement. Clearly, even if the market rate of leases were $1.44 per square foot, no reasonable arms-length lease agreement would provide for an additional cut in rent after more than two decades. In addition, since Pepsi was responsible for the property taxes instead of the owner, it was in Pepsi’s best interest to drive the value of the property as low as possible. Moreover, Pepsi as lessee had so many of the duties of an owner it was almost indistinguishable from an owner. Under the terms of the lease, the only thing the eventual owner could do was collect rent and take the eventual reversion.
The leases in Mid-Cities Mall, however, are conceded by the board to be arms-length leases of a small portion of the mall undertaken with terms, conditions, and rents similar to leases in many other malls at the time they were signed.
In the second case, People v. Tax Commission of City of New York, 17 A.D.2d 225, 233 N.Y.S.2d 501 (1962), the New York court simply made a policy choice. The lease was entered into during the depression for twenty-one years with a renewal for an additional twenty-one years at the same rate. The property was sold, while still under the lease, for [639]*639$225,000 in 1954. The taxing authority fixed the value at $365,000. The court recognized that:
"Of course, an outstanding bona fide lease and the rental income established thereby are matters to be considered in determining 'the full value’ of the whole property, land and improvements. Value arrived at by capitalization of the fair rental value is, in ordinary cases, the surest guide to a sound appraisal. In that connection, the actual rent realized is significant as an important factor in determining what the fair rental value is. But when there is evidence that factors such as long-term leases made under distress or boom conditions affect the actual rent, the weight to be given to the actual rent must be discounted accordingly.” Id. at 230, 233 N.Y.S. 2d at 507. (Citations omitted.)
Fluctuating economic conditions are too uncertain and varying in time to determine if a lease was made in a "boom” or "bust” era or to form a basis for passing judgment on the business decisions of persons who are not available to defend those decisions. The value in the presence of long-term leaseholders may be difficult to set since they serve as magnet stores for all other stores in the mall. Also, such long-term leaseholders may give stability to a mall which may or may not be financially attractive depending on continually changing economic circumstances. When agreed to, the square footage charges may very well have been economically attractive for the mall owner and tenant. As one of the board members commented, there was a good possibility that if the original builders of the Mid-Cities Mall had not entered the long-term leases under the terms they did, the mall itself might never have begun construction or started as a business entity. Then the city never would have [640]*640had the mall within its tax base. Should the board or this court be allowed to declare the terms of that lease a "bad business decision” simply because overall inflation caused rents to rise in a fashion no one could predict? We reject the invitation of the New York court to require businesspersons to be equipped with precognition; we refuse to second guess their business judgments, as long as such judgments were entered into at arms-length.
The Wisconsin Constitution requires in Article VIII, sec. 1: "The rule of taxation shall be uniform ....” If the city taxes property on the basis of the income the assessor theorizes the property might produce rather than the actual rent the property does produce, the principle of uniform taxation would be violated. Other landowners would be taxed on the basis of what their property will sell for, but the landowner with long-term leases will be taxed on what the assessor believes the land might produce, not what the land will sell for in an arms-length transaction.
We do not hold that actual rents will always control an estimate of property value; however, we hold that actual rents of arms-length leases must be considered as a factor in determining market value. Primarily we hold that a recent arms-length sale of the property is the "best information” to arrive at the full tax assessment value of that property, and capitalization of so-called "market” rent is not the best evidence of value in the presence of such a sale. As the board did not consider the "best information” in arriving at its valuation of the Mid-Cities Mall, we affirm the decision of the court of appeals.
By the Court. — The decision of the court of appeals is affirmed.