Appraisal Articles 2018 Free Appraisal Articles for Appraisers and the Public
There are a number of different types of healthcare facilities and each type serves its own sub-market and its own specialized clientele. Healthcare facility appraisals usually deal with the valuation of; hospitals, urgent care facilities, long-term care / skilled-care (nursing) facilities, assisted-living facilities, medical clinics and doctor’s offices. Most real property appraisers are retained to form a value opinion of the real property for lenders, partners, for acquisition / disposition, for litigation and / or for tax purposes. “Going-concern” appraisals of healthcare facilities can also be completed by real property appraisers however significantly more expertise is required to appraise the entire business operation including the real property that for the facility alone.
Appraisers are already busy dealing with the valuation of many of the new senior care facility alternatives in the form of small group homes and unlicensed assisted living facilities. I have discussed small facilities, often just single-family homes, and how their group home use can alter their single-family residential character in another article on this site. Appraisals of this type are dangerous for appraises unless they understand that a business is being run from the building that is separate from the real estate.
Heath care properties are special use or special purpose in nature, most could not easily be used for an alternate purpose and thus there is a limited market for them. They offer an opportunity for a building and land only appraisal or an opportunity to appraise the going-concern that also includes the business entity. All is relatively upbeat in the healthcare / senior care world in early 2015. Trade journals report a number of consolidations completed in 2014 with even more planned in the short-term future. More government involvement and more government money in health care has effectively increased the number of health care transactions by almost 8% in 2014.
Appraisers discover that, even if they are not in a market like Las Vegas / Henderson Nevada where most of the buildings are relatively new, there is a great deal of consistency in values for office and medical office / healthcare buildings with similar uses. It’s counter intuitive to think that small single-tenant or multi-tenant buildings have similar values per square foot as larger-scale buildings, but it’s often true. As an appraiser looking at the value of smaller buildings, like 5,000 square feet (SF), and then looking at buildings over 100,000 SF I expect to find large differences but it’s often not the case.