Non-Disclosure State

A state in the United States where the sales price of a sold property is not publicly available. In such situations, the sales value is estimated – for tax assessment and other purposes – using other metrics which are publicly available, such as the loan amount granted by the bank or the mortgage transfer taxes paid.

Putting ‘Non-Disclosure State’ in Context

Lone Star Industrial Partners, a real estate investment firm specializing in industrial assets, recently acquired Northpoint Logistics Center, a 500,000-square-foot warehouse and distribution facility located in the Dallas-Fort Worth metro area. The property is strategically located near major highways and logistics hubs, making it a prime target for firms seeking efficient supply chain operations.

Since Texas is a Non-Disclosure State, the purchase price of the property is not publicly available. While the deal was widely reported in trade publications, the exact transaction value was not disclosed, leaving market observers and competitors to rely on indirect indicators to estimate the sale price.

Estimating the Purchase Price

To value the property for purposes such as tax assessment or market analysis, analysts look to publicly available data like:

• Loan Amount: Lone Star Industrial Partners secured a loan of $45 million to finance the acquisition. Assuming a loan-to-value (LTV) ratio of 70 percent, analysts estimate the purchase price to be approximately $64.3 million:

  Estimated Purchase Price = Loan Amount / LTV Ratio = $45,000,000 / 0.7 = $64,285,714

• Comparable Sales Data: In the Dallas-Fort Worth industrial market, similar properties with comparable square footage, tenant rosters, and locations have sold for an average of $125 per square foot. Applying this metric, Northpoint Logistics Center is estimated to have a market value of $62.5 million:

  Estimated Value = 500,000 SF × $125/SF = $62,500,000

Practical Implications

The lack of direct sales price disclosure can introduce challenges for competitors and market analysts attempting to benchmark similar transactions. However, for Lone Star Industrial Partners, this presents a competitive advantage by keeping sensitive pricing details confidential. The firm leveraged its detailed market knowledge and relationships with local brokers to ensure accurate valuation and underwriting.

For local tax authorities, this non-disclosure framework necessitates reliance on appraisals, loan documents, and comparable sales data to establish property tax assessments. In this case, an appraisal value close to the $62–$64 million range is likely.

Conclusion

Northpoint Logistics Center exemplifies the dynamics of a Non-Disclosure State like Texas. While the confidentiality of sales data shields proprietary information, it also underscores the importance of alternative valuation methods to maintain transparency for tax and regulatory purposes. Real estate professionals operating in such states must be adept at piecing together incomplete data to make informed decisions.