Appraisal Articles 2019 Free Appraisal Articles for Appraisers and the Public
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.
Once you are asked to analyze another type of healthcare facility you begin to realize just how diverse they are. Medical and dental offices have their own markets and their build-out makes them specialized for their specific function. Urgent care centers are the same and some offices and small medical centers even have their own surgical suites.
Long-term care (LTC) facilities, many of which have been designated as skilled nursing facilities (SNFs) or "sniffs" can be analyzed as facility-only (real property) or as going-concern that include their personal property and business entity. As you would guess LTC facilities deal mostly with the elderly and they generally have a mix of private pay and Medicare paid residents that require 24-hour care. Nursing facilities have a relatively large overhead due to their need for a diverse staff. They often have access to oxygen in rooms, commercial kitchens, administrative centers and staff offices.
Licensed assisted living facilities are more about the living arrangements than the health care, and you may find one nurse on duty in a large facility. The nurse puts on band-aides but not much else, they just call "911." The facilities provide rooms, meals and activities for fully functioning residents who can afford them, and their value generally has to do with their income.
Acute rehabilitation facilities are the facilities where acute hospitals send their patients after surgery or treatment. The properties are generally intensely used since many of the treatments provided to recovering patients are provided in these facilities. Again they employ a large staff of nurses and support staff, and analyzing the "going-concerns" takes a lot of time and research.
General hospitals or acute care hospitals are either for-profit or not-for-profit, and in Las Vegas we have almost all for-profit facilities which make them easier to appraise. Again appraisals can be of the real property or of the going-concern. The facilities make their money on the treatment of critical care / intensive care patients who have relatively short stays.
Appraising healthcare facilities requires an appraiser to focus on market segments that they generally don't deal with. Most commercial properties, like retail buildings and offices, benefit from location and traffic counts from adjoining roadways that contain the general public, but market demand for healthcare facilities has a lot more to do with demographics and competition.
For more appraisal information contact the author, Glenn Rigdon, MA, MRICS, ASA a Las Vegas / Henderson Nevada real property appraiser via email or via his business website Horizon Village Appraisal (http://www.horizonvillageappraisal.com), or you can also click on “Contact Us” on the home page of this website.
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