Acuity level can impact what is driving business value and real estate value in healthcare properties, something all lenders and investors should understand.
The separating out of business value from real estate value in healthcare properties has always been a controversial issue. When lenders lend against the value of an LTAC or a skilled nursing facility, their security interest is really in the real estate, and not the business. But the real estate without that business, without that CON or license, can see its value drop quite suddenly. Should anyone care where the values lie if they are really looking at the full enterprise value? Absolutely. What happens if a facility is old, has little competition and is quite profitable, but suddenly wakes up to new competition that is not only taking its customers, but also its employees? The value drops and my bet is that the real estate allocation drops as well, not to mention a lender’s security interest. Join me tomorrow on our webinar when long-time experts Jim Tellatin and Chuck Herman will be answering my questions, and yours, about how to allocate value, and why it is so important. Click here to sign up.