Section 10.1A Valuation of a Leasehold Interest

• Library: Eminent Domain 3rd Edition 2013

It is generally held that a lessee is entitled to a sum that will adequately compensate him for his pecuniary loss as a result of the exercise of the power of eminent domain.

State ex rel. Morrison v. Carlson, 83 Ariz. 363, 321 P.2d 1025 (1958)

The measure of compensation to which the lessee is entitled is the market value of his leasehold interest and the landowner has the burden of persuasion on the issue of damages.

City of Sierra Vista v. Cochise Enters., 144 Ariz. 375, 697 P.2d 1125 (App. 1984)

It is well recognized that leases commonly are not assignable without the consent of the landlord, are infrequently sold, and vary so much in length of term, rent reserved, and other particulars, including the differences in the properties involved, that it is almost impossible to apply the customary test of market value to a leasehold interest.

State ex rel. Morrison v. Carlson, 83 Ariz. 363, 321 P.2d 1025 (1958)

One statement of the measure of damages for the taking of a leasehold interest is the value of the use and occupancy of the leasehold for the remainder of the tenant’s term, plus the value of the right to renew, less the agreed rent which the tenant would pay for such use and occupancy.

Alamo Land & Cattle Co., Inc. v. Ariz., 424 U.S. 295, 96 S. Ct. 910, 47 L. Ed. 2d 1 (1976)

Alternate language for the measure of damages for a leasehold interest is the difference between the market value of the unexpired term of the lease over and above the rent stipulated to be paid, reduced to present value.

Pepsi-Cola Metro. Bottling Co. v. Romley, 118 Ariz. 565, 578 P.2d 994 (1978) (this case suggests that the period of time for compensation is limited to the unexpired term of the...