We have appraised several Senior Care facilities
throughout Chicagoland, as well as Mental Health Facilities, Hospitals, Animal Veterinary Clinics, and Private Practice Medical
Office Buildings.
Medical buildings
are subject to a gamut of State and Federal regulations with which an appraiser must account for throughout the appraisal
process. Below is an excerpt from the introduction to the Gross Income Approach of an appraisal preformed at a Senior Living
Facility in Cook County:
"The subject
is a 114-unit senior residential apartment
complex. It is located
in [city], in an area with mostly a variety of single-family residential
housing improvements as well as office and medical uses. The tenants are provided with meals,
housekeeping, and activities as required by the Section 42 statute. There is an on-site nursing staff
available 24-hours a day, seven days a week, primarily for medicine
distribution. This type
of
property takes longer than a typical apartment building would for all the units
to be absorbed into the market.
Its real estate value and non-real estate asset value are directly
correlated to the subject’s occupancy.
Lease up for supportive living facilities can be as long as five years
especially with the income, age and care requirements of the subject. The subject is a Section 42 property
(of the Internal Revenue Code, 1986) as determined by IHDA, the Illinois
Housing Development Authority and there are income and rent restrictions. Furthermore, ownership cannot transfer
within 30-years or all of the tax credits will be lost. The subject is under the jurisdiction
of the Department of Public Aid (an assisted living facility would be under the
jurisdiction of the Department of Public Health).
As stated, this type of property takes longer than a typical apartment
building would for all the units to be absorbed into the market. Its real estate value and non-real
estate asset value are directly correlated to the subject’s occupancy. Lease up for assisted living facilities
can be as long as five years. The
subject, as of the writing of this report, was at 93% occupancy. The tenants are provided with meals,
housekeeping, and activities as required by the Section 42 statute. There is an on-site nursing staff
available 24-hours a day, seven days a week, primarily for medicine
distribution.
This type of property takes longer than a typical apartment
building would for all the units to be absorbed into the market. Its real estate value and non-real
estate asset value are directly correlated to the subject’s occupancy. Lease up for assisted living facilities
can be as long as five years. The
subject, as of the writing of this report, was at 93% occupancy."
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