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Overview

We represented a 30,000 square foot, 91-bed skilled nursing facility in Maryland. In 2016, the property had an assessment of $5.3 million. In Maryland, income-producing properties are required to provide three years of actual income and expense data in advance of a revaluation. Additionally, many Maryland assessors rely heavily on the income approach to determine the assessed values for senior living properties. 

Challenge

A substantial portion of the income of a skilled nursing facility is generated by the operations, and a much smaller portion is attributable to rent for the real estate. While the actual income for the property would support a number above the assessment, Altus Group was successfully able to explain that a significant portion of the property’s income was related to the going concern (business), and not just real estate. Altus Group provided the assessor with a cost approach and an income approach to support a reduction. The income approach provided by Altus Group applied specialized analysis that effectively removed the business income from the going concern income stream, resulting in a real estate only value indication.  

Services provided

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

Results

Overall, Altus Group was able to reduce the original assessment value by 25% to $4 million. The reduction resulted in our client realizing about $65,000 in tax savings over three 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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