While the sale of most assisted-living facilities tends to include both the real estate and the business, it is not uncommon for the business to be sold separately from the real estate. Sometimes it's also a matter of the seller keeping the real estate and leasing it to the business buyer. When a facility is operating and stabilized, the income approach to value is usually the best measure of the business and the real estate. We use this approach in a few ways when the business and real estate are separated in … [Read more...]
What’s The Price Per Unit? Good Question.
There are several approaches to value, as we’ve written about in the past. One approach that can be dangerous is simply multiplying the number of units times the price per unit that you saw for another property. The price per bed or unit won’t determine the facility's value, it’s just one of the measures that results from the valuation. While the price per unit or price per bed isn’t a good way to determine value, it can be a useful benchmark when comparing similar properties. But that raises another question: … [Read more...]