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Overview

We represented four micro-hospitals that were all built between 2015 and 2016. The total construction costs were north of $80 million for all four properties. The four micro-hospitals sold together in 2017 for a combined purchase price of about $135 million.  

Challenge

Following the sale, the assessors reappraised the properties for $87 million, $48 million less than the purchase price and near the original construction costs. 

Services provided

Our technology-enabled expert services enable commercial real estate professionals to connect to the market with greater speed, visibility and efficiency.

Results

With micro-hospitals being a new property type to their respective taxing jurisdictions, there was much debate as to how to appropriately value these properties. Altus Group walked through the properties with all of the taxing jurisdictions and utilized our 30+ years of experience in healthcare to explain the unique challenges in valuing a special-use healthcare property such as a micro-hospital. These walk-throughs and discussions led to more than $48 million worth of reductions. The new assessed values totaled just under $39 million, which was $96 million less than the 2017 purchase prices and 50% of the actual construction costs. The reduction in values led to our client realizing about $3 million in tax savings over two years.

Services provided

Our technology-enabled expert services enable commercial real estate professionals to connect to the market with greater speed, visibility and efficiency.

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