Sam's Real Estate Business Trust, Wal-Mart Real Estate Business Trust, and Walmart, Inc. v. City of Ames Iowa Board of Review

CourtCourt of Appeals of Iowa
DecidedJune 24, 2026
Docket25-1342
StatusPublished

This text of Sam's Real Estate Business Trust, Wal-Mart Real Estate Business Trust, and Walmart, Inc. v. City of Ames Iowa Board of Review (Sam's Real Estate Business Trust, Wal-Mart Real Estate Business Trust, and Walmart, Inc. v. City of Ames Iowa Board of Review) is published on Counsel Stack Legal Research, covering Court of Appeals of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Sam's Real Estate Business Trust, Wal-Mart Real Estate Business Trust, and Walmart, Inc. v. City of Ames Iowa Board of Review, (iowactapp 2026).

Opinion

IN THE COURT OF APPEALS OF IOWA _______________

No. 25-1342 Filed June 24, 2026 _______________

Walmart, Inc., Sam’s Real Estate Business Trust, and Wal-Mart Real Estate Business Trust, Plaintiffs–Appellants, v. City of Ames Iowa Board of Review, Defendant–Appellee. _______________

Appeal from the Iowa District Court for Story County, The Honorable John J. Haney, Judge. _______________

AFFIRMED _______________

Paul J. Esker (argued), Paul D. Burns, and Olivia A. McGovern of Bradley & Riley PC, Iowa City, attorneys for appellants.

Brett Ryan (argued) of Watson & Ryan, PLC, Council Bluffs, attorney for appellee. _______________

Heard at oral argument by Schumacher, P.J., and Ahlers and Badding, JJ. Opinion by Badding, J.

1 BADDING, Judge.

Imagine two storefronts, each with a “For Sale” sign posted in its window. The properties are identical in every respect but one: Store #1 is owned and occupied by a successful business that will vacate at the time of sale. Store #2 comes with a long-term lease to a creditworthy tenant who pays below-market rent. According to Walmart 1 —who raised a version of this hypothetical at oral argument—a rational buyer would pay more for Store #2, because that store comes with a guaranteed income stream. The other is just “bricks and sticks.”

In a real-world transaction, that analysis might be right. Real estate investors must account for the cost and risk in making an empty building profitable again. But when it comes to the art of property valuation, our law allows assessors to set those worries aside. Rather than appraising commercial real estate as if it were vacant, they may treat it “as a going concern” and “consider conditions as they are.” Soifer v. Floyd Cnty. Bd. of Rev., 759 N.W.2d 775, 788 (Iowa 2009) (citations omitted). And viewed through that lens, the lease on Store #2 looks more like a burden than a benefit. What buyer, when offered the chance to stand in the shoes of Store #1’s current owner, would choose an underperforming lease instead?

This case involves similar economics at a larger scale. Walmart challenges the district court’s order denying its tax assessment appeals for three big-box retail stores. At the heart of the parties’ dispute is a methodological question that has sharply divided the appraisal industry, and one which we have declined to take up in past appeals. Citing diverging outcomes in its protests across the state, Walmart urges us to take a clear 1 We refer to the named plaintiffs—Walmart, Inc., Sam’s Real Estate Business Trust, and Wal-Mart Real Estate Business Trust—collectively as “Walmart.”

2 stance on its theory that owner-occupied properties must be assessed on a “fee simple” basis rather than on “a hypothetical assumption that the property is leased at market rates.” We accept that invitation, reject Walmart’s argument, and uphold the assessments at issue.

I. Factual and Procedural Background

Walmart owns three commercial properties in the City of Ames. A property at 305 Airport Road features a 115,596-square-foot 2 Sam’s Club situated on a 16.4-acre lot. A property at 3105 Grand Avenue features a 156,833-square-foot Walmart Supercenter on a 14.5-acre parcel. And a property at 534 South Duff Avenue features a 215,689-square-foot supercenter on a 22.6-acre lot. All three properties are owned and occupied by Walmart, which uses them to operate its retail business.3

In 2023, the city assessor increased the tax assessments for each of Walmart’s properties, valuing the stores at $9,704,200 (Airport Road), $17,574,600 (Grand Avenue), and $21,227,200 (South Duff Avenue). Walmart challenged the assessments before the Ames Board of Review, but the Board denied relief.4 See Iowa Code § 441.37(1)(a)(1) (2023). Walmart appealed to the district court, see id. § 441.38, which heard testimony from three commercial real estate appraisers at a consolidated bench trial in

This number comes from the report of Walmart’s appraiser, Chris Jenkins. Its 2

other appraiser, Gerald Maier, listed the property’s square footage at 115,338. According to the property card in our record, the titleholder for the Grand 3

Avenue property is “Ames Iowa, LLC,” doing business as “Walmart.” It is unclear how this company is related to the named Walmart entities who operate the Grand Avenue supercenter. That said, there is no dispute between the parties that all three properties are functionally, if not factually, owner-occupied. 4 Walmart also challenged a 2024 assessment at the Airport Road property. But the parties entered a stipulation about that assessment, and it is not at issue in this appeal.

3 March 2025. Walmart’s experts, Gerald Maier and Chris Jenkins, opined that the market value of each store was millions of dollars less than the value assessed. Board expert Mark Kenney opined that each property’s value was greater by a million dollars or more.

Methodology was the fighting issue at trial. Walmart argued that Kenney’s sales-comparison analysis, which sought to establish the market value of the properties through transactions involving leased big-box stores, “failed to comply with Iowa law because he did not value the subject properties” as though they were “owner-occupied.” Specifically, Walmart argued that by failing to “subtract the independent value added by the leases” from his comparator sales, Kenney improperly inflated his valuation of Walmart’s properties. The district court rejected this theory, crediting Kenney’s valuation over those of Maier and Jenkins. Walmart now appeals.

II. Standard of Review

A taxpayer’s direct appeal from a local board of review is triable in equity, so our review is de novo. Iowa Code § 441.38(3); Story Cnty. Wind, LLC v. Story Cnty. Bd. of Rev., 990 N.W.2d 282, 285 (Iowa 2023). Although they are not binding, we give weight to the district court’s factual findings, especially when they concern credibility of witnesses. Nationwide Mut. Ins. Co. v. Polk Cnty. Bd. of Rev., 983 N.W.2d 37, 42 (Iowa 2022).

III. Analysis

A. Property Assessment Principles

Under Iowa’s property tax assessment scheme, taxable property must be assessed at its “actual value,” which means its “fair and reasonable market value.” Iowa Code § 441.21(1)(a), (b). “Market value” is defined as the “fair and reasonable exchange in the year in which the property is listed and valued

4 between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and each being familiar with all the facts relating to the particular property.” Id. § 441.21(1)(b)(1).

Section 441.21 describes two approaches for assessing a property’s market value: the “comparable sales” approach and the “other factors” approach. See Compiano v. Bd. of Rev. of Polk Cnty., 771 N.W.2d 392, 396 (Iowa 2009). The comparable-sales approach—which seeks to determine market value by reference to actual sales of similar properties—is the preferred method of valuation. Iowa Code § 441.21(1)(b)(1) (“Sale prices of the property or comparable property in normal transactions reflecting market value . . . shall be taken into consideration in arriving at its market value.”).

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Sam's Real Estate Business Trust, Wal-Mart Real Estate Business Trust, and Walmart, Inc. v. City of Ames Iowa Board of Review, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sams-real-estate-business-trust-wal-mart-real-estate-business-trust-and-iowactapp-2026.