Appraisal Articles 2019 Free Appraisal Articles for Appraisers and the Public
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.
For appraisers limited to working in only one or two local health care markets the increasing prices of facilities and increasing number of consolidations means fewer health care players, fewer deals and as a result fewer appraisals.
Based on the data that I have recently reviewed there are some health care property types that are more in demand than others. Not surprisingly long-term care (LTC) facility sales and hospital sales volumes were both up in 2014.
There are REITs and major NYSE corporations acquiring and disposing of health care assets including LTC, Hospital, Pharma and Medical Device companies, and 2015 will likely continue to see a high level of activity in this area.
While the number of Hospital deals has decreased over the years the total price paid for those acquired has skyrocketed with many hospital deals being several million dollars, and groups of them into the billions.
In most metropolitan areas there are only a few hospital sales or LTC sales in any given year and in other areas there may be none, so sales approach research for appraisers may by necessity take you to other areas. Since most health care facilities are owner occupied there is also often a dearth of rental data. So the income approach may also prove to be tenuous.
Thus many health care facility real property appraisals end up relying heavily on the cost approach. It is however important for appraisers of healthcare facilities to understand that there are changing market conditions and understand the volume and sales price trends.
For more appraisal information contact Glenn Rigdon, MA, MRICS, ASA a Las Vegas / Henderson Nevada appraiser via email at firstname.lastname@example.org 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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