We recently hosted a webinar on a topic that has been on the minds of many as the healthcare real estate market hit record-high prices (in seniors housing and care) and deals with changing acuity and reimbursement environments. “Real Estate vs. Business Value For Healthcare Properties” featured moderator Steve Monroe of The SeniorCare Investor and speakers James Tellatin of Tellatin, Short & Hansen, and Chuck Herman of Charles Herman Consulting (formerly CIO of Welltower), and a 90-minute discussion on the valuation practices for skilled nursing facilities, assisted living communities, LTACs, behavioral healthcare and acute care hospitals. We also brought in our listeners to the discussion and posed a few questions. First, when buying, selling, financing or appraising a healthcare/senior care property, we asked if they separate out the business from the real estate value. A 79% majority responded either “sometimes” or “most of the time,” with just 21% never separating them out. Related to that, as the value of the property rises, we asked whether the rise was mostly in business or real estate value; 79% chose the former. That makes sense, considering most value-add opportunities emphasize a drastic improvement in operations, although fixing the physical plant is usually a priority too. Finally, we asked when banks lend, if our listeners believe their loan-to-value is based on the real estate value or the total value. Another majority (62%) selected “total value,” given that especially in health care, the business is more tied to the building than other real estate classes. Click here to hear the whole discussion!