A 350,000 square foot senior housing property sold as part of a portfolio in a RIDEA transaction in 2015. The recorded deed indicated a purchase price of $79 million and the buyer’s 10K showed a total purchase price of $116 million.
The year after the sale, the assessor raised the assessment to $69 million, well below the sales price. However, Altus Group determined that the new assessed value was above the market value of the real estate and moved forward with an appeal.
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With the deed and 10K in hand, the assessor was very aggressive in defending their assessed value. However, through many discussions about RIDEA structures and the large amount of intangible business value included in a senior living property’s income stream, we were able to reduce the original assessment value to $50 million. The reduction resulted in our client realizing about $1.2 million in tax savings over four years.