Eminent Domain and Investment Property in Texas

Income is the value

An appraisal of income property usually combines comparable sales with an income approach reflecting the rent roll, vacancy history, operating expenses and lease terms. Where the taking changes what the property can earn, the effect belongs in the valuation rather than in a separate conversation.

What the lease decides

The condemnation clause in each lease determines how proceeds are apportioned between landlord and tenant, whether the lease terminates on a taking, and who may claim for improvements. Read those clauses before negotiations begin.

Tenants displaced by a project

Where tenants must move, their position depends on the lease and on the facts. Texas treats relocation and business losses more restrictively than several other states, so confirm what applies rather than assuming.

Partial takes that change the income

Losing parking spaces, a loading area, signage or convenient access can reduce achievable rent even when no building is touched. That reduction shows as remainder damage, and it is proved with market evidence rather than assertion.

What to gather

• The rent roll and current lease terms
• The condemnation clause in each lease
• Operating expenses and vacancy history
• Site plan showing parking, access and signage
• Photographs of entries and frontage before construction