Ashland City Report - Cheatham County Chamber of Commerce

Transcription

An Appraisal of
A Proposed Assisted Living Facility
VantagePointe Village at Ashland City
1164 Vantage Pointe Road
Ashland City, Tennessee
Prepared For
Love Funding Corporation
1250 Connecticut Avenue Northwest
Suite 310
Washington, D.C.
Prepared By
Valuation & Information Group
6167 Bristol Parkway
Suite 430
Culver City, California
October 12, 2011
Cortney Mauldin
VP FHA Deputy Chief Underwriter
1250 Connecticut Avenue Northwest
Suite 310
Washington, D.C. 20036
Re:
Dear Mr. Mauldin:
In accordance with your request, we have conducted a self-contained appraisal of the total assets of
the business for the above referenced property. The subject is a proposed 81,252-square-foot
assisted living facility that will contain 60 assisted living units (60 beds) and 20 memory care
assisted living units (20 beds). However, three of the assisted living two-bedroom units will be
licensed to provide double occupancy (couples). Given this factor, the facility will have the licensed
capacity for 86 residents although it is projected to operate only 80 beds. The quality of construction
is expected to be good and the condition of the improvements is assumed to be new.
The primary purpose of this valuation is to estimate the as-stabilized fee simple market value of the
total assets of the business in accordance with Healthcare Appraisal Guidelines for HUD/FHA
Section 232 Lean Program. It is our understanding that this appraisal will be used in connection with
HUD financing.
The value reported herein is that of the fee simple estate, which includes the land, improvements,
equipment and business assets. We did not include working capital in our valuation but have
assumed that it is available and adequate to support the operations of the facility.
This appraisal investigation included a visit to the property on September 7, 2011, and all necessary
investigation and analyses were made by the appraisers. The appraisal was prepared in accordance
with Uniform Standards of Professional Appraisal Practice (USPAP) and Healthcare Appraisal
Guidelines for HUD/FHA Section 232/New Construction Lean Program and involved the facts,
assumptions, investigations and analyses set forth in the report.
Based upon the procedures outlined in this report, it is estimated that the as-stabilized, fee simple
market value of the total assets of the business, as of September 7, 2011, is reasonably represented in
the following rounded amount:
$12,630,000
October 12, 2011
Page 2
This estimate and the report are subject to the statement of facts and limiting conditions that are a
critical part of our valuation report. No part of the appraisal report should be published or
disseminated without Valuation and Information Group’s prior written approval.
Thank you for the opportunity to provide you this service.
Respectfully submitted,
Valuation and Information Group
Daniel J. Schneider
Senior Vice President
TN Temp. Permit 00056259
DJS/TRL/JPL/HL:cb
210212
SUBJECT PHOTOGRAPHS
Facing Northwest across Proposed Subject Site
Facing West across Proposed Subject Site
Facing Northeast across Proposed Subject Site
Vacant land and VantagePointe Homes at Marrowbone Heights to the south
Sycamore Apartments to the Northwest
VantagePointe Homes at Marrowbone Heights to the Northeast
Entrance Road to the Subject and VantagePointe Homes at Marrowbone Heights
South on Highway 12 South
North on Highway 12 South
Walmart Supercenter to the Northwest
SUMMARY OF SALIENT FACTS
Property
Assessor's Parcel Numbers
Part of parcels 062-013.04 and 062-013.05 (a new parcel
number will be assigned to the subject site as created from
pieces of these parcels)
Interest Appraised
Fee simple estate
Effective Date of Appraisal:
As Is
September 7, 2011
Date of Physical Inspection
September 7, 2011
Date of Report
October 12, 2011
Type of Value
To estimate the fee simple as-is market value of the total
assets of the business assuming the completion and
stabilization of the project, as of the date specified within
this report.
Intended Use
In connection with HUD financing
Land Size
The subject’s site will consist of 4.405 acres, or 191,882
square feet; the site is currently part of two parcels, which
contain 9.05 acres, or 394,218 square feet, combined.
Zoning
PUD – Planned Unit Development
Building Description
The subject is a proposed 81,252-square-foot senior living
community that will contain 60 assisted living units (60
beds) and 20 memory care assisted living units (20 beds).
However, three of the assisted living two-bedroom units
will be licensed to provide double occupancy (couples).
Given this factor, the facility will have the licensed capacity
for 86 residents although it is projected to operate only 80
beds. These units will be contained within one four-story
building. The quality of construction is expected to be good
and the condition of the improvements is assumed to be
new.
Licensing
86 beds (assisted living facility)
Highest and Best Use:
As Vacant
As Developed
Senior living facility
Senior living facility
Value Indicators:
Fee Simple:
Replacement New, Land & FF&E $12,900,000
Cost Approach
Land
Improvements
Equipment
Value Indication
$380,000
11,920,000
600,000
$12,900,000
Sales Comparison Approach
$12,650,000
Income Capitalization Approach
Occupancy Level
Net Income
Capitalization Rate
Total (rounded)
91.5%
$1,199,591
9.5%
$12,630,000
Value Conclusion - Fee Simple
$12,630,000
This value may be allocated as follows:
Land
$380,000
Improvements
11,650,000
Equipment
600,000
Business
0
Total
$12,630,000
Special Limiting Conditions:
The subject is a proposed assisted living facility. The premise of this valuation is to value the
proposed subject property assuming stabilized occupancy levels with an effective date of
valuation of September 7, 2011. As of this effective date of value, the subject facility was not
built, much less stabilized. This hypothetical condition is consistent and appropriate for
underwriting criteria under the HUD Lean program.
The subject’s site is part of two existing parcels that contain 9.05 acres combined. Upon
completion, the subject’s site will consist of 4.405 acres. The valuation is based on the
hypothetical condition that the subject’s site will be subdivided from the two existing parcels
and will be established a separate legal entity.
CERTIFICATION
We certify that to the best of our knowledge and belief:
1. The statements of fact contained in this report are true and correct.
2. The reported analyses, opinions and conclusions are limited only by the reported
assumptions and limiting conditions and are our personal, unbiased professional analyses,
opinions and conclusions.
3. We have no present or prospective interest in the property that is the subject of this report
and we have no personal interest or bias with respect to the parties involved.
4. We have no bias with respect to the property that is the subject of this report or to the parties
involved with this assignment.
5. Our engagement in this assignment was not contingent upon developing or reporting
predetermined results.
6. Our compensation is not contingent upon the development or reporting of a predetermined
value or direction in value that favors the cause of the client, the amount of the value
estimate, the attainment of a stipulated result or the occurrence of a subsequent event directly
related to the intended use of this appraisal.
7. The reported analyses, opinions and conclusions were developed, and this report has been
prepared, in conformity with the requirements of the Code of Professional Ethics and the
Standards of Professional Appraisal Practice of the Appraisal Institute, which include the
Uniform Standards of Professional Appraisal Practice.
8. Daniel J. Schneider made a personal inspection of the subject property, supervised the
appraisal process and determined the value conclusion.
9. Jean-Pierre LoMonaco, MAI, provided significant professional assistance to the person
signing this report, which included reviewing the appraisal, but did not inspect the subject
property. Thomas R. Lettieri also inspected the subject property and provided significant
professional assistance to the person signing this report, which included verifying land sales
and collecting tax data. Howard Lee also provided significant professional assistance to the
persons signing this report, which included a draft of the Cost, Sales Comparison and
Income Capitalization approaches, but did not inspect the subject property.
10. The use of this report is subject to the requirements of the Appraisal Institute relating to
review by its duly authorized representatives.
11. This appraisal was not based on a requested minimum valuation, a specific valuation or the
approval of a loan.
12. As of the date of this report, Jean-Pierre LoMonaco, MAI, has completed the continuing
education program of the Appraisal Institute. As of the date of this report, Daniel J.
Schneider, Brian Murphy and Greg Farrell have completed the Standards and Ethics
Education Requirement of the Appraisal Institute for Associate Members.
13. I have not provided any services regarding the subject property within the three-year period
immediately preceding acceptance of the assignment, as an appraiser or in any other
capacity. Employees of the Valuation & Information Group have not provided any services
regarding the subject property within the three-year period immediately preceding
acceptance of the assignment, as an appraiser or in any other capacity.
HUD Certification:
I understand that our appraisal will be used by Love Funding Corporation to document to the U.S.
Department of Housing and Urban Development (HUD) that the Lean Lender’s application for FHA
multifamily mortgage insurance was prepared and reviewed in accordance with HUD requirements.
I certify that my review was in accordance with the HUD requirements applicable on the date of our
review and that I have no financial interest or family relationship with the officers, directors,
stockholders or partners of the Borrower, the general contractor, any subcontractors, the buyer or
seller of the proposed property or engage in any business that might present a conflict of interest.
I am under contract with Love Funding Corporation for this specific assignment (appraiser) and we
have no other side deals, agreements or financial considerations with the Lean Lender or others in
connection with this transaction.
Daniel J. Schneider
TN Temp. Permit 00056259
Warning: Title 18 U.S.C. 1001, provides in part that whoever knowingly and willfully makes or uses
a document containing any false, fictitious or fraudulent statement or entry, in any manner in the
jurisdiction of any department or agency of the United States, shall be fined not more than $10,000
or imprisoned for not more than five years or both.
STATEMENT OF FACTS AND LIMITING CONDITIONS
This appraisal report has been made with the following assumptions and limiting conditions:
1. We assume no responsibility for the legal description furnished to us, stated in the report or
for matters pertaining to legal or title considerations. In arriving at the opinion expressed in
this report, we assumed that the owner holds good and marketable title, free and clear of all
liens except those described herein.
2. If no legal description or survey was furnished, we used the county tax plat to ascertain the
physical dimensions and acreage of the property. Should the information furnished to or
obtained by us prove to be inaccurate, the property’s value may be more or less than what is
stated in this report.
3. We appraised the property free and clear of any or all liens or encumbrances unless
otherwise stated.
4. We assumed that the property is an established business, with efficient and competent
owners and management, experienced in the healthcare industry.
5. We assumed that the information furnished by others is reliable, but we were given no
warranty of its accuracy and we make no such warranty.
6. We assumed all engineering studies to be correct. To the extent that we have included plot
plans and illustrative material in this report, we have done so solely to help the reader
visualize the property and make no representations in connection with such depictions.
7. We assumed that there are no hidden or unapparent conditions of the property, subsoil or
structures that render it more or less valuable. We assume no responsibility for such
conditions or for obtaining the engineering studies that may be required to discover them.
8. We assumed that the owner and management have fully complied with all applicable federal,
state and local laws and regulations, including without limitation any zoning, use and
environmental restrictions, unless any noncompliance or nonconformity is stated, described
and considered in the report.
9. We assumed that all required licenses, certificates of occupancy, consents and other
legislative or administrative authority from any local, state or national government or private
entity or organization have been or can be obtained or renewed for any use on which the
value estimate contained in this report is based.
10. We assumed that the use of the land and improvements is confined within the boundaries or
property lines of the property described and that there is no encroachment or trespass unless
noted in the report.
11. Unless otherwise stated in this report, we were not informed of and did not observe the
existence of hazardous materials, which may or may not be present on the property. We are,
however, not qualified to detect such materials. We assume no responsibility for such
conditions or for any expertise or engineering knowledge required to discover them. The
presence of asbestos, urea-formaldehyde foam insulation and other potentially hazardous
materials may affect the value of the property. The intended user of the property and this
appraisal is urged to retain a hazardous materials expert. In valuing the property, we
assumed that there are no hazardous materials in or about the property that diminish the
property’s value.
12. Any allocation of the total value estimated in this report between the land and the
improvements applies only under the stated program of utilization. The separate values
allocated to the land and buildings must not be used in conjunction with any other appraisal
and are invalid if so used.
13. Possession of this report, or a copy thereof, does not carry with it the right of publication.
14. Upon delivery of this report, we are not required to provide any additional services or
testimony, or to appear or attend any judicial or other proceeding pertaining to the
preparation or content of this report, the properties or interests described in it, or any matter
that is or could have been addressed in it, unless we make or have made a separate
arrangement specifically addressing this.
15. Neither all nor any part of the contents of this report (especially any conclusions as to value,
our firm’s identity or the identity of the appraiser) shall be disseminated to the public
through advertising, public relations, news, sales or other media without our prior written
consent and the approval of the appraiser.
16. Any value estimates provided in the report apply to the entire property, and any proration or
division of the total into fractional interests will invalidate the value estimate, unless such
proration or division of interests has been set forth in the report.
17. We used only preliminary plans and specifications in the preparation of this appraisal except
as indicated, and the analysis based upon any preliminary plans and specifications is made
subject to a review of the final plans and specifications when available.
18. We assume that any proposed improvements have been completed unless otherwise
stipulated, and we assume that any construction conforms to the building plans referenced in
the report.
19. We assume that the reader or user of this report has been provided with copies of available
building plans and all leases and amendments, if any, that encumber the property.
20. The forecasts, projections or operating estimates contained herein are based on current
market conditions, anticipated short-term supply and demand factors, and a continued stable
economy. These forecasts are, therefore, subject to change with future conditions.
21. We have not analyzed the requirements of the Americans with Disabilities Act (ADA), as
amended, as they may pertain to this property or whether the property complies with the
ADA. We were not engaged to, and did not, survey or analyze the property to determine
whether or not the property or its operations complies with the requirements of the ADA.
We assume no responsibility for the property’s noncompliance or for any expertise or
knowledge required to discover such noncompliance. If the property is not in compliance
with the requirements of the ADA, such condition may affect the value of the property. The
intended user of the property and this appraisal is urged to retain an ADA expert. In valuing
the property, we assumed that there is no material noncompliance in or about the property
that diminishes the property’s value.
22. We have prepared this report in conformity with and subject to the requirements of the code
of professional ethics and the standards of professional conduct of the professional appraisal
organizations of which we are members.
23. We assume no responsibility to report to any person, including any financial, regulatory or
tax authority, any matters or information obtained or analyzed in preparing this report.
24. This report and the valuation estimate stated herein are valid only for the purpose stated and
as of the date stated.
25. In preparing this report, we have relied, where appropriate, on information, including
historical financial and operating data, and assumptions provided to us by the property’s
owner and management. We have not audited such information and give no warranty or
other assurance as to the accuracy of such information and assumptions. Some of the
assumptions inevitably shall not materialize, and unanticipated events and circumstances
may occur, therefore, actual results achieved may vary from the forecasts and the variance
from the assumptions may be material. We have assumed, however, that this data is correct
and will accurately reflect the operating performance of the subject property. Our valuation
estimate would be affected by any material misstatement in the information provided to us.
26. We have assumed that there are no legal or political matters affecting the future operation of
the property, unless the property’s owner or management have called such matters to our
attention and they are stated herein.
27. This report may depend in part upon our opinions about the future operations of the
property. These opinions are usually expressed in terms of what we “anticipate,” believe,”
“expect” or similar words. Actual results may differ from our projections.
28. We assume no responsibility to supplement or amend this report for conditions or events
occurring after the date of this report.
TABLE OF CONTENTS
INTRODUCTION ................................................................................................................................. 1
PROPERTY IDENTIFICATION .............................................................................................................. 1
TYPE AND DEFINITION OF VALUE ..................................................................................................... 1
INTENDED USE, INTENDED USERS AND CLIENT................................................................................ 1
SCOPE OF THE APPRAISAL ................................................................................................................ 2
APPRAISAL STANDARDS ................................................................................................................... 3
PROPERTY RIGHT APPRAISED ........................................................................................................... 3
EFFECTIVE DATE OF THE APPRAISAL ............................................................................................... 4
APPRAISAL DEFINITIONS ................................................................................................................... 4
COMPLIANCE ..................................................................................................................................... 5
COMPETENCY .................................................................................................................................... 5
SALES AND PROPERTY HISTORY ....................................................................................................... 5
REASONABLE EXPOSURE TIME ......................................................................................................... 6
ASSISTED LIVING INDUSTRY OUTLOOK .................................................................................... 7
DEMAND ............................................................................................................................................ 7
SUPPLY ............................................................................................................................................ 10
PAYORS ........................................................................................................................................... 16
TENNESSEE ASSISTED LIVING OVERVIEW ...................................................................................... 17
REGIONAL ANALYSIS .................................................................................................................... 21
DEMOGRAPHICS .............................................................................................................................. 23
EMPLOYMENT ................................................................................................................................. 26
HOUSING ......................................................................................................................................... 28
TRANSPORTATION ........................................................................................................................... 29
EDUCATION ..................................................................................................................................... 30
HEALTHCARE .................................................................................................................................. 30
CONCLUSION ................................................................................................................................... 33
NEIGHBORHOOD ANALYSIS ........................................................................................................ 34
FACILITY OVERVIEW..................................................................................................................... 38
MANAGEMENT OVERVIEW.............................................................................................................. 40
SITE DESCRIPTION .......................................................................................................................... 41
SITE CHARACTERISTICS .................................................................................................................. 41
TOPOGRAPHY AND DRAINAGE ....................................................................................................... 41
SOILS HAZARDS .............................................................................................................................. 41
FLOOD ZONE ................................................................................................................................... 41
UTILITIES......................................................................................................................................... 42
ZONING............................................................................................................................................ 42
EASEMENTS/ENCROACHMENTS/RESTRICTIONS .............................................................................. 43
ASSESSMENT AND TAXES ............................................................................................................... 43
ESTIMATED ASSESSMENT AND TAXES ............................................................................................ 43
IMPROVEMENTS DESCRIPTION................................................................................................... 44
BUILDING ........................................................................................................................................ 44
LAYOUT ........................................................................................................................................... 45
SITE IMPROVEMENTS ...................................................................................................................... 46
DEPRECIATION ................................................................................................................................ 47
INTANGIBLE AND OTHER ASSETS ................................................................................................... 47
EQUIPMENT ..................................................................................................................................... 47
SUMMARY ....................................................................................................................................... 48
MARKET AREA ................................................................................................................................ 48
ASSISTED LIVING/MEMORY COMPETITION............................................................................. 53
PMA DEMOGRAPHIC ANALYSIS ................................................................................................. 66
NON-MEMORY CARE ASSISTED LIVING DEMAND................................................................. 68
MEMORY CARE DEMAND ............................................................................................................. 74
HIGHEST AND BEST USE ............................................................................................................... 79
HIGHEST AND BEST USE AS THOUGH VACANT ............................................................................. 80
HIGHEST AND BEST USE AS IMPROVED ......................................................................................... 81
VALUATION METHODOLOGY ..................................................................................................... 83
COST APPROACH............................................................................................................................. 85
LAND VALUATION .......................................................................................................................... 85
BUILDING AND SITE IMPROVEMENTS VALUATION ........................................................................ 92
EQUIPMENT VALUATION ................................................................................................................. 98
RECONCILIATION WITH MANAGEMENT’S COST SCHEDULE ........................................................... 98
COST APPROACH SUMMARY ......................................................................................................... 100
INSURABLE VALUE........................................................................................................................ 100
SALES COMPARISON APPROACH ............................................................................................. 101
PRICE PER UNIT COMPARISON – ASSISTED LIVING ...................................................................... 104
CONCLUSION ................................................................................................................................. 108
EFFECTIVE GROSS INCOME MULTIPLE ......................................................................................... 111
SALES COMPARISON APPROACH CONCLUSION ............................................................................ 112
INCOME CAPITALIZATION APPROACH ................................................................................... 112
HISTORICAL PERFORMANCE ......................................................................................................... 113
NET OPERATING INCOME (NOI) ................................................................................................... 135
CAPITALIZATION PROCESS ............................................................................................................ 138
INCOME CAPITALIZATION APPROACH SUMMARY ........................................................................ 141
OPERATING DEFICIT ...................................................................................................................... 141
CORRELATION OF VALUE .......................................................................................................... 143
ADDENDUM
Exhibit A
-
Exhibit B
Exhibit C
Exhibit D
Exhibit E
-
Area Map, Neighborhood Map, Plat Map, Property Drawings, Zoning
Information and Demographics
Comparable Land Sales Map, Data Sheets and Photographs
Improved Sales Map, Data Sheets and Photographs
Financials
Appraiser’s Licenses and Qualifications
Page 1
INTRODUCTION
PROPERTY IDENTIFICATION
The subject property is within a larger multifamily development (VantagePointe Homes at
Marrowbone Heights) in Ashland City, Tennessee. The site will have direct access from Highway 12
South. The subject is part of parcel numbers 062-013.04 and .05. A new parcel number will be
assigned to the subject site as split from this larger parcel.
TYPE AND DEFINITION OF VALUE
The purpose of the appraisal is to set forth an estimate of and support for the market value of the total
assets of the business. For the purpose of this report, “market value” is defined as follows:
The most probable price which a property should bring in a competitive and open
market under all conditions requisite to a fair sale, the buyer and seller each acting
prudently and knowledgeably and assuming the price is not affected by undue
stimulus. Implicit in this definition is the consummation of a sale as of a specified
date and the passing of title from seller to buyer under conditions whereby:1
a)
b)
c)
d)
e)
buyer and seller are typically motivated;
both parties are well informed or well advised and each acting in what they
consider their best interests;
a reasonable time is allowed for exposure in the open market;
payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and
the price represents the normal consideration for the property sold unaffected
by special or creative financing or sales concessions granted by anyone
associated with the sale.
INTENDED USE, INTENDED USERS AND CLIENT
This report is to be used in connection with HUD financing. The intended users are representatives of
Love Funding Corporation, and the Department of Housing and Urban Development (HUD). Our
client in this engagement is Love Funding Corporation.
1
Office of the Comptroller of the Currency, 12 CFR Part 34.42g.
Page 2
SCOPE OF THE APPRAISAL
The subject is a going concern with a substantial real estate base. Included in the concept of going
concern are tangible and business assets comprising the business. Tangible assets include land, site
improvements, building and equipment. In addition to tangible assets, also known as real and personal
property, the subject includes various business assets necessary for the provision of healthcare, dietary,
housekeeping, laundry and ancillary services. The provision of these services may create a going
concern value beyond the value of the real and personal property. These assets, which tend to increase
in value in relation to the level of services provided, include an assembled work force, referral sources,
systems and procedures, resident records and goodwill. This appraisal is of the entire going concern,
one part of which is real estate. For this reason, this appraisal engagement has been conducted using
applicable standard appraisal techniques and is in conformity with the Uniform Standards of
Professional Appraisal Practice (USPAP) as set forth by the Appraisal Foundation and HUD 232 Lean
Processing guidelines.
This appraisal engagement entails the collection, analysis and description of data pertaining to the
physical, legal and economic conditions that affect the use and value of the subject property, and any
other relevant data that would pertain to the appraisal of a senior care facility.
The scope of the appraisal includes, but is not limited to, the following:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Conducting an inspection of the subject property.
Describing the property and its environment.
Conducting an analysis of the city and neighborhood.
Estimating the market value of the land by the analysis of the land sales identified.
Estimating the depreciated replacement cost of the improvements which, when added to the
land and equipment, indicates the market value via the Cost Approach.
Conducting a search for (with verification) and analysis of sales of similarly improved
properties.
Estimating the market value by the analysis of the sales identified via the Sales Comparison
Approach.
Estimating the fee simple market value via the Income Capitalization Approach.
Reconciling the three approaches to value for the final value estimate.
Preparing an appraisal report in a self-contained format based on all findings.
Page 3
APPRAISAL STANDARDS
This appraisal engagement has been conducted using applicable standard appraisal techniques and is in
conformity with the Uniform Standards of Professional Appraisal Practice (USPAP) and Healthcare
Appraisal Guidelines for HUD/FHA Section 232/New Construction Lean Program. The report will be
used by the U.S. Department of Housing and Urban Development (HUD) for the specific purpose of
lending decisions as outlined by their appraisal requirements.
HYPOTHETICAL CONDITION
A hypothetical condition is defined by USPAP as a condition “which is contrary to what exists but is
supposed for the purpose of analysis.” Hypothetical conditions assume conditions contrary to known
facts about physical, legal, or economic characteristics of the subject property; or about conditions
external to the property, such as market conditions or trends; or about the integrity of data used in an
analysis. A hypothetical condition may be used in an assignment only if:
•
•
•
Use of the hypothetical condition is clearly required for legal purposes, for purposes of
reasonable analysis, or for purposes of comparison;
Use of the hypothetical condition results in a credible analysis; and
The appraiser complies with the disclosure requirements set forth in USPAP for
hypothetical conditions.
The subject is a proposed assisted living facility. The premise of this valuation is to value the
proposed subject property assuming stabilized occupancy levels with an effective date of valuation of
September 7, 2011. As of this effective date of value, the subject facility was not built, much less
stabilized. This hypothetical condition is consistent and appropriate for underwriting criteria under the
HUD Lean program.
PROPERTY RIGHT APPRAISED
The property rights appraised herein are the fee simple of the tangible and business assets. These
interests are defined as follows:
Page 4
Fee Simple Estate: Absolute ownership unencumbered by any other interest or
estate, subject only to the limitation imposed by the governmental powers of taxation,
eminent domain, police power, escheat. 2
EFFECTIVE DATE OF THE APPRAISAL
The effective date of this analysis is September 7, 2011. The site was inspected on September 7, 2011.
APPRAISAL DEFINITIONS
For the purposes of this report, “self-contained appraisal report” is defined as:
A written report prepared under Standards Rule 2-2(a).3
“Going-concern value” is defined as:
The value of a proven property operation. It includes the incremental value associated
with the business concern, which is distinct from the value of the real property. It
includes an intangible enhancement of the value of the operating business enterprise,
which is produced by the assemblage of the land, buildings, labor, equipment, and the
marketing operation. This assemblage creates an economically viable business that is
expected to continue. The value of the going concern refers to the total value of the
property, including both the real property and the intangible personal property
attributed to business enterprise value.4
“Personal property” is defined as:
Movable items of property that are not permanently affixed to, or part of, the real
estate.5
For purposes of this appraisal, we consider equipment to represent personal property.
2
The Appraisal of Real Estate, Thirteenth Edition, Appraisal Institute, Illinois, 2008, page 111.
3
Uniform Standards of Professional Appraisal Practice, 2010-2011 Edition, The Appraisal Foundation,
Washington D.C., page 22.
4
The Appraisal of Real Estate, Thirteenth Edition, Appraisal Institute, Illinois, 2008, pages 29-30.
5
Ibid., page 7.
Page 5
Our estimate of value reflects the value in a proven property operation considered as an assembled
economic unit. The value estimate is expressed in terms of cash.
COMPLIANCE
To the best of our knowledge, the analyses, opinions and conclusions that were developed in this
report have been prepared in conformity with the regulations of the Uniform Standards of Professional
Appraisal Practice (USPAP) of the Appraisal Foundation and Healthcare Appraisal Guidelines for
HUD/FHA Section 232/New Construction Lean Program.
COMPETENCY
From our understanding of the assignment to be performed, which is addressed in the Scope of the
Appraisal, it is our opinion that we are competent to perform this appraisal due to the fact that:
1. The appraisers have knowledge and experience in the nature of this assignment.
2. All necessary and appropriate steps have been taken in order to complete the
assignment competently.
3. There is no lack of knowledge or experience that would prohibit this assignment from
being completed in a professional, competent manner or where a biased or misleading
opinion of value is to be rendered.
SALES AND PROPERTY HISTORY
Any sales of the subject property that have occurred within a three-year period prior to the effective
date of value have been considered. There has not been any sale within the last three-year period.
However, the subject’s developer (Ashland Heights, L.P.) purchased both the existing parcels in which
the subject’s site will be part of, as part of a larger land purchase in March 30, 2009. This transaction
included the acquisition of 25.0 acres for $1,250,000, or 50,000 per acre. The majority of this land was
improved with a multifamily apartment complex (VantagePointe Homes at Marrowbone Heights).
Page 6
REASONABLE EXPOSURE TIME
“Reasonable exposure time” is defined as:
The estimated length of time the property interest being appraised would have been
offered on the market prior to the hypothetical consummation of a sale at market value
on the effective date of the appraisal; a retrospective estimate based upon an analysis
of past events assuming a competitive and open market.6
The concept of reasonable exposure time encompasses not only adequate, sufficient and reasonable
time, but also adequate, sufficient and reasonable effort. This concept also takes into consideration the
type of property being appraised, supply/demand conditions as of the effective date(s) of the appraisal
and the analysis of historical sales information (sold after exposure and after completion of
negotiations between the seller and buyer). The reasonable exposure period is therefore a function of
price, time and use, and is not an isolated estimate of time alone.
Reasonable exposure time is always presumed to precede the effective date of the appraisal and differs
for various types of real estate and under various market conditions. Our estimate of exposure time is
therefore based on the subject property's determined highest and best use, in a market where there is
evidence of demand for such a facility.
The estimate of reasonable exposure time is not a predication, but rather a judgment made by the
appraiser based on market conditions preceding the effective date of the appraisal.
Based upon the determination of the highest and best use for the subject, with consideration given to
the overall condition and physical characteristics of the subject, it is our opinion that, were the subject
property offered for sale, a sale could occur within 12 months.
6
Uniform Standards of Professional Appraisal Practice, 2010-2011 Edition, The Appraisal Foundation,
Washington D.C., page 89.
Page 7
ASSISTED LIVING INDUSTRY OUTLOOK
Assisted living is defined as the long-term care option in which communities provide housing,
supportive services, personalized assistance with activities of daily living (ADL) and healthcare, and
are licensed, certified or registered by states. Seniors who choose assisted living receive customized
assistance to fit their needs which benefits and enriches their lives, and promotes independence and
well-being. Staff is available to meet both scheduled and unscheduled needs.
Activities of daily living (ADLs) include bathing or showering, dressing, eating, getting in or out of
bed or chair, walking and using the toilet.
Instrumental activities of daily living (IADLs) include using the telephone, doing light housework,
doing heavy housework, preparing meals, shopping for personal items and managing money.
DEMAND
The rapid increase in the elderly population is the force behind the tremendous expansion of the senior
housing and long-term care industries. The U.S. Bureau of the Census estimates that between 1990
and 2050, the number of Americans aged 65 and older will more than double (from 31 million in 1990
to more than 79 million in 2050).
The United States population statistics and forecasts are provided in the following table:
U.S. Population Growth
Total Population
65+ Population
% of Total
75+ Population
% of Total
85+ Population
% of Total
2000
2011 Estimate % Change 2016 Projection % Change
281,421,906
310,650,750
10.4%
323,031,618
4.0%
34,991,753
41,346,659
18.2%
47,902,230
15.9%
12.4%
13.3%
14.8%
16,600,767
19,087,926
15.0%
20,546,648
7.6%
5.9%
6.1%
6.4%
4,239,587
5,846,730
37.9%
6,546,281
12.0%
1.5%
1.9%
2.0%
Source: T he Nielsen Company
Page 8
Over the next five years the fastest growing age group is expected to be the 65+ population.
In the United States, the population made up of those 65 years of age or older is projected to increase
from 12.4% of the population in 2000 to 20.7% by 2050 because of the aging of the baby boom
generation and increased longevity. The implications for the delivery and financing of healthcare will
be profound because elderly persons use healthcare services at a greater rate than younger persons.
The larger number of elderly persons will put greater pressure on the budget for the Medicare
program. Increases in the number of persons 85 years of age or older, who are most likely to require
nursing home and other long-term care, will exert similar pressure on the Medicaid program, which
pays for about half the total costs of nursing home care.
A factor contributing to growth in demand for elderly care is the increased life expectancy of the
United States population. As the average life expectancy for both men and women continues to
increase (as illustrated in the following table) the probability of an elderly person requiring some form
of healthcare service also increases.
1940
1950
1960
1970
1980
1990
2000
2009
UNITED STATES LIFE EXPECTANCY
Men
Women
At Birth
At Age 65
At Birth
At Age 65
60.9
11.9
65.3
13.4
65.6
12.8
71.1
15.0
66.6
12.8
73.1
15.8
67.1
13.1
74.7
17.0
70.0
14.1
77.4
18.3
71.8
15.1
78.8
18.9
74.1
16.0
79.3
19.0
75.7
17.3
80.6
19.9
Source: National Center for Health Statistics
While most major healthcare providers will benefit as America ages, the senior housing/care industry
will be the chief beneficiary.
Page 9
The total projected expenditure for all services from the age of 65 years until death is $164,505. Of
this amount, $105,342 is for Medicare plus cost sharing, $34,205 is for nursing home care not covered
by Medicare, $11,428 is for home healthcare not covered by Medicare, $9,546 is for prescription
drugs and $3,984 is for vision, dental care and durable medical equipment (see following table). Total
expenditures from the age of 65 years until death rise substantially with longevity, from $31,181 for
persons who die at the age of 65 years to over $200,000 for those who die at the age of 90 or older.
This pattern is determined by the substantial increase in nursing home expenditures for the very
elderly.
Mean Cumulative Expenditures Per Person For Acute And Long-Term
Care From The Age Of 65 Years Until Death, According To The Age At Death
All
Services
Age At Death (Yr)
All Persons > 64
65
70
75
80
85
90
95
100
>101
164,505
31,181
87,116
123,823
157,903
193,727
235,369
287,980
358,174
407,425
Medicare-Covered
Services Plus
Cost Sharing
Nursing
Home
Care
Home
Care
Mean Expenditure (Dollars)
11,428
34,205
105,342
2,024
1,751
26,161
3,658
5,829
72,302
5,614
12,168
96,459
8,909
22,529
112,857
13,692
39,009
123,722
20,019
64,665
130,042
27,948
104,069
132,341
37,476
163,563
130,910
43,390
207,926
128,617
Prescription
Drugs
9,546
1,073
3,564
6,681
9,656
12,335
14,667
16,634
18,214
18,913
Other
Services
3,984
171
1,762
2,901
3,952
4,969
5,976
6,988
8,011
8,579
Source: The Effect of Longevity on Spending for Acute and Long-Term Care, New England Journal of Medicine, May 11, 2000,
Volume 342, Number 19, by Brenda C. Spillman, Ph.D. and James Lubitz, M.P.H.
Medicare-covered services and nursing home care from the age of 65 until death for a cohort of
persons born in 1950 and projected to turn 65 in 2015 will be 73% greater than the combined
expenditures for a cohort of persons born in 1935 and projected to turn 65 in 2000. The most
important factor underlying the difference in expenditures is the higher number of persons projected to
turn 65 in 2015. This increase is due primarily to the larger number of births in the 2015 cohort (4.27
million versus 2.72 million in the 2000 cohort), which accounts for 70% of the difference, but also to a
higher rate of survival to the age of 65 years (80% in the 2015 cohort versus 74% in the 2000 cohort),
which accounts for 22% of the difference. Greater longevity after the age of 65 plays a much smaller
part, accounting for only 8% of the difference in total spending. Increased longevity has a larger role
in nursing home expenditures than in Medicare expenditures. The 3% increase in life expectancy at
Page 10
the age of 65 for the cohort of people born in 1950 is associated with less than a 1% increase in the
simulated mean Medicare expenditure ($109,352 versus $108,361 for the cohort of people born in
1935) but with a 6% increase in the mean expenditure for nursing home care ($46,168 versus
$43,613). Persons 85 years of age or older (“the oldest old”) are projected to represent an increasing
proportion of the elderly population. Of the persons turning 65 in 2000, 44% will survive to the age of
85 years and expenditures for their care will account for 60% of total spending for the cohort. Of the
persons turning 65 in 2015, 47% will survive to the age of 85 years. Expenditures for this group will
account for 63% of total spending.
Changes in the financing and delivery of acute- and long-term care may alter spending patterns and
levels. The proportion of Medicare beneficiaries who are enrolled in HMOs is growing. Payments
based on risk-adjusted capitation and other changes in payment are likely. New approaches to the
provision of long-term care that emphasize community-based services may reduce the use of nursing
home and hospital care, although there is no evidence that in the aggregate such changes will reduce
total expenditures for long-term care. Shifts in the location of care without a reduction in costs would
likely have a greater effect on the distribution of payments among insurers than on actual spending
levels. A greater shifting of costs to elderly persons and their families is also possible.
SUPPLY
Many types of in-home care services and new kinds of senior housing with a wide range of costs and
services are emerging to meet the needs of America's aging population. Defining the different types of
housing options can be difficult since there are many types and variations that can vary from facility to
facility, and since many residences offer more than one type of housing or care.
Over the past decade, consumers have pushed for a continuum of care that would allow them to
remain in their homes or senior communities for as long as possible rather than automatically move to
a medical setting when their disabilities increase. At the same time, the success of the consumerdriven approach of assisted living has caused other housing and care providers to rethink how to best
serve their residents. As a result, the distinct lines that once separated independent living, assisted
living and other models have become blurred as each segment has expanded, causing some
overlapping of services.
Page 11
The definitions below should be considered a general guide to the types of housing options seniors
may find.
Home and Day Care Services
If an individual needs assistance, a combination of health and social services may
allow the older person to continue living at home if desired. The home can be
physically adapted with a variety of helpful features to make it more accessible. Home
health aides can help with daily activities such as medication, bathing and dressing.
Homemaker services can help with housekeeping, cooking, and home and yard
maintenance. Meals on Wheels and other groups may deliver low cost, nutritious
lunches to homebound elders. Visiting nurses, medical laboratories, and occupational
and physical therapists can provide in-home medical services.
Many cities have adult day care programs where seniors can spend daytime hours
socializing to relieve the individual's primary caregiver. Many of these programs are
designed for seniors in relatively good health but with cognitive or mental difficulties.
These programs are often nonprofit and low cost but often have waiting lists. Local
support groups for specific illnesses, community organizations and agencies are a
good source for finding other appropriate care and support services.
Retirement Communities
There are many types of retirement communities to choose from and they vary greatly
in services offered, scope and price. The communities range from lushly landscaped,
country-club style condominium developments in a suburb to senior apartments in a
bustling urban area.
Traditional retirement communities, sometimes called active adult communities,
restrict admission to adults above a certain age and offer security, recreational
facilities, planned activities and perhaps communal dining and housekeeping.
Planned adult communities can be open to renters, or offer condominiums or homes
for purchase. Medical services are not included, but are generally located nearby.
Senior apartment complexes, also called congregate housing, generally charge a
monthly rental fee and security deposit for services such as transportation, activities
and meals. Some are under federal housing guidelines and only accept low income
seniors, but most are privately owned.
Continuing Care Retirement Communities
A continuing care retirement community (CCRC), or life care community, provides
housing and health-related services to an older person under an agreement effective
for the person's lifetime or a specified period of time. This living alternative can be
attractive since it eliminates the need for moving when the individual's health and
medical needs change. An essential part of continuing care is the provision that a
resident can stay in the community even if he or she needs skilled nursing services.
Some CCRCs require a substantial entry fee or buy-in, which may be forfeited if the
person dies or decides to leave. Most also charge monthly maintenance fees in
exchange for a living unit, meals and some health services. Both types of fees vary
greatly among CCRCs, depending on location, size of the unit, services and programs.
Page 12
CCRCs typically require that the individual be in relatively good health and
independent upon entrance. Those with serious illnesses or limited financial resources
may not qualify for admission to this type of community.
Assisted Living
Assisted living is a type of licensed care that provides personal care services, support
and housing for those who need help with daily activities, yet need limited medical
care. Assisted living can be in an independent facility or part of a retirement,
continuing care or life care community. The programs and services offered may
include transportation, social activities, exercise and fitness programs, beauty or
barber shop access, hobby and craft activities, community excursions, meals in a
dining room setting and other activities sought by residents. These facilities are often
in apartment-like buildings with private residences ranging from single rooms to large
apartments. Rooms may be at least partially furnished with the resident's belongings.
Although assisted living facilities are not licensed to perform skilled nursing
activities, residents can sometimes receive skilled nursing care from outside licensed
home health agencies that come in on a daily or weekly basis.
Alzheimer's Facilities
An increasing number of facilities are focusing on the needs of people with
Alzheimer's or other dementia-related illnesses. These facilities may be exclusively
dedicated to or have special sections or areas for elderly residents with these
conditions. Typically, Alzheimer's facilities offer a secured environment, a high ratio
of staff to residents and special activity programs designed for those with limited
attention spans.
Other services may include incontinence care, medication
management and transportation to medical appointments. Alzheimer’s facilities may
be licensed as either assisted living or skilled nursing.
Skilled Nursing Facilities
A skilled nursing facility is state-licensed to provide room and board, nursing care,
supervision and medical care. These facilities are also referred to as convalescent
homes, rehabilitation homes or hospitals, and nursing homes. They provide the type
of extended nursing care not given in assisted living or residential care homes. Skilled
nursing facilities, at a minimum, include skilled nursing, dietary and pharmaceutical
services, and an activity program.
Skilled nursing facilities provide three levels of care, defined as basic, skilled and
subacute. Basic care is the level of care required to maintain daily living activities and
includes personal care and supervision. Skilled care is for residents needing the
services of a registered nurse or other medical professional on a regular basis, for
treatments and procedures. Subacute care is comprehensive inpatient care for someone
who has an acute illness or injury and requires frequent patient assessment.
Facilities usually bill for two types of charges. There are standard daily rates for
room, care and some nursing services, and extra charges for any services not included
in the basic rate such as therapies, pharmacy, wheelchairs, dental care, hand feeding or
care for incontinence. Skilled nursing facilities are generally the most expensive
senior housing option. Thus, financial planning is critical since private insurance,
Page 13
Medicaid and Medicare have only limited provisions for skilled nursing care. A
skilled nursing facility may be the best and only alternative when an individual needs
24-hour nursing care and supervision.
The following tables summarize the national inventory of senior housing/care properties:
SENIOR HOUSING PROPERTIES WITH
SUPPORTIVE SERVICES IN THE U.S.
Type of Property
Freestanding Congregate Care
Freestanding Assisted Living (30+ units)
Freestanding Assisted Living (1 to 29 units)
Freestanding Skilled Nursing
CCRC
Properties Combining Assisted and Congregate
Properties Combining Assisted and Skilled Nursing
Total Properties
Properties
3,214
3,781
19,333
15,640
1,900
850
1,413
46,131
Source: NIC National Supply Estimate of Senior Housing & Care Properties 2000
SUPPLY OF SENIOR HOUSING UNITS/BEDS
WITH SUPPORTIVE SERVICES IN THE U.S.
Type of Property
Properties
Congregate Care
705,376
Assisted Living
585,735
Skilled Nursing (Beds)
1,928,714
Total Properties
3,219,825
Source: NIC National Supply Estimate of Senior Housing & Care Properties 2000
NEW CONSTRUCTION ACTIVITY
The American Seniors Housing Association and the National Investment Center for the Seniors
Housing & Care Industry identified a total of 2,060,000 existing units in the 100 largest metropolitan
areas of the country, and of those, 29,708 senior apartments, assisted living units, independent living
units, dementia care units and nursing care units are under construction. The 2010 report identified
233 new or expanding senior housing properties under construction containing 29,708 units/beds.
These numbers reflect construction activity within freestanding, combined and continuing care
retirement community (CCRC) properties. The senior properties tracked include a small number of
Page 14
HUD Section 202 properties and other types of affordable properties, in addition to market rate rental
senior apartments.
The number of senior housing properties under construction in 2010 (233) is less than was being
constructed in 2009 (420) and lower than the survey’s peak year (1998) in which 614 senior housing
units were reported to be under construction.
There are 9,265 new senior apartment units under construction in the 100 largest metropolitan areas.
Including the units in expansions to existing properties, senior apartments account for 31% of all
senior housing units under construction.
There are 7,067 new independent living units under construction in the 100 largest metropolitan areas.
Including the units in expansions to existing properties, independent living units account for 24% of
all senior housing units under construction.
There are 5,437 new assisted living units under construction in the 100 largest metropolitan areas.
Including the units in expansions to existing properties, assisted living units account for 18% of all
There are 2,374 new dementia care units under construction in the 100 largest metropolitan areas.
Including the units in expansions to existing properties, dementia care units account for 8% of all
Data collected in 2010 reveals that senior apartment units represent 31% of the total national sample of
seniors housing units under construction, followed by independent living units (24%), assisted living
units (18%) and dementia care units (8%). The balance is comprised of nursing care units (19%).
Page 15
The following graph illustrates the total units under construction by property type in 2010:
Total Units Under Construction by Property Type
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Senior
Apartment
Independent Assisted Living Dementia Care
Living
Source: 2010 Seniors Housing Construction Trends Report
NEW CONSTRUCTION BY CITY
Dallas is the top metro area in terms of the number of units being built (2,328). New York ranks
second (2,018), followed by San Francisco (1,986), Chicago (1,692) and Los Angeles (1,234). These
five metro areas represent 31% of all senior housing units reported under construction as of March
2010.
New York and Dallas had the greatest number of projects (new and expansions) under
construction with 19 each, followed by Chicago (16), Los Angeles (13) and Philadelphia (12).
Page 16
New Construction in Top Metro Areas
2,500
2,000
1,500
1,000
500
0
Dallas
New York
San
Francisco
Chicago
Los Angeles
Source: 2010 Seniors Housing Construction Trends Report
Independent Living
The metro area with the largest number of existing independent living units is Philadelphia, with
27,423 units, followed by Chicago (24,392), Los Angeles (17,109), New York (15,779) and
Washington (15,579). The metro area with the highest percentage of independent living construction
to existing supply is Ogden, Utah (114.5%), followed by Raleigh, North Carolina (25.5%), Austin
(9.6%), San Antonio (7.8%) and San Diego (5.7%).
All Assisted Living
The metro area with the largest number of existing assisted living units is New York, with 18,092
units, followed by Los Angeles (16,419), Chicago (8,577), Portland, Oregon (7,928) and Boston
(7,614). The metro area with the highest percentage of assisted living construction to existing supply
is Boise (21.3%), followed by Lakeland, Florida (18.8%), Nashville (15.0%) and Memphis (14.2%).
PAYORS
Residents and/or their families generally pay for the cost of congregate and assisted living services,
whereas skilled nursing facilities rely heavily on governmental reimbursements. Some states provide
for reimbursement of assisted living through a variety of funding programs, such as Medicaid waiver
programs.
Medicaid coverage is common (37 state Medicaid programs currently cover assisted
Page 17
living), but participation is not. As opposed to congregate and assisted living, 70.0% to 75.0% of
revenue for skilled nursing facilities is derived from Medicaid.
The following table illustrates the distribution of residents’ annual household income by care segment:
ANNUAL HOUSEHOLD INCOME BY SEGMENT
Home Independent Assisted Skilled
General Care
Living
Living Nursing
Income
Income of Resident:
<$25,000
$25,000 to $74,999
>$75,000
Total Worth of Resident:
<$50,000
$50,000 to $99,999
$100,000 to $299,999
$300,000 to $499,999
>$500,000
Total
72.5%
21.7%
5.7%
72.7%
25.5%
1.8%
68.8%
28.1%
3.1%
71.9%
24.6%
3.5%
80.2%
16.5%
3.3%
73.3%
22.1%
4.5%
40.6%
27.0%
20.6%
4.2%
7.7%
50.8%
19.4%
20.2%
4.8%
4.8%
53.1%
12.5%
15.6%
15.6%
3.1%
45.5%
12.7%
23.6%
5.5%
12.8%
62.4%
14.0%
18.3%
2.2%
3.3%
45.4%
22.9%
20.3%
4.6%
6.9%
Source: NIC National Survey of Adult Children 2000
Wealthier households are more likely to receive home care or live in independent living or assisted
living communities compared to lower income households, which are more likely found in skilled
nursing facilities. Overall, 73% of residents have annual household income of less than $25,000,
22.1% had income between $25,000 and $74,999, and 4.5% had an income of $75,000 or more.
TENNESSEE ASSISTED LIVING OVERVIEW
The Department of Health, Division of Care Facilities licenses assisted living facilities (referred to as
assisted care living facilities) in Tennessee. The regulations have been in effect since April 1998.
Major revisions to the rules became effective in May 2009, marking the first significant change in
regulations for assisted care living facilities.
Page 18
The Long-Term Care Community Choices Act of 2008 changed the way facilities operate and are
regulated. Signed into law in June 2008, the act allows assisted living facilities to care for residents
with greater healthcare needs and clarifies that hospice service can be provided in such facilities.
An assisted care living facility is a building, establishment, complex or distinct part thereof that
accepts primarily aged persons for domiciliary care and services.
Included in the on-site care
provided, there is also room and board, non-medical assistance with activities of daily living (ADLs)
and medical services, as prescribed by each resident’s physician.
The residence must have an
accurately written statement about the fees and services that are provided to the resident upon
admission and provide a copy of the resident’s rights for the resident to review and sign. Each facility
must also disclose in writing to the resident whether it has liability insurance the identity of the
primary insurance carrier.
SCOPE OF CARE
Assisted care living facilities must provide personal care services, and appropriately licensed or
qualified staff or contractors at these facilities may provide medical services and oversight of medical
services. Medical services may also be provided by a licensed home care organization, appropriately
licensed staff of a nursing home, or another appropriately licensed entity. Medication must be selfadministered or administered by a licensed professional. Facilities are permitted to assist residents
with medication, including reading labels, reminders and observation.
MOVE-IN/MOVE-OUT REQUIREMENTS
Facilities are required to assess prospective residents before they move in to make sure they meet the
definition of an assisted living facility resident. The written assessment must be completed within 72
hours of admission. Regular assessments must be completed to ensure that residents do not need a
higher level of care. Residents in secured units must be reviewed quarterly by an interdisciplinary
team.
Page 19
If an individual or facility is no longer able to care for the individual’s conditions, he or she must be
transferred to an appropriate setting. Also unpermitted from admission or continued residency are
those with the following characteristics:
•
Physical or chemical restraints.
•
Posing a serious threat to self or others.
•
Arterial blood gas monitoring.
•
Requires continuous nursing care.
•
Has an active, infectious disease in a communicable state that requires contact isolation.
•
The treatment of extensive Stage III or IV decubitis ulcer or exfoliative dermatitis.
Those with nasopharyngeal or tracheotomy aspiration, nasogastric feedings, gastrostomy feedings, or
intravenous therapy or intravenous feedings may not be admitted, but if the individual is already a
resident, a facility may allow him or her to remain for up to 21 days. If such treatments are
intermittent and extend beyond 21 days, there may be two additional 21-day extensions granted by the
facility, with certification from the resident’s treating physician that the individual’s intermittent need
for such treatment can be safely and effectively met by care provided in the facility.
The continued stay of existing residents who require the aforementioned treatments on an ongoing
basis are not permitted to remain in the facility, unless the resident is receiving hospice care or does
not qualify for a nursing facility level of care. In the latter case, the Board for Licensing Health Care
Facilities may grant a waiver allowing the person to remain in the facility. Residents who require the
aforementioned treatments, but do not need the assistance of facility personnel or licensed entities,
may be admitted or permitted to continue as a resident in an assisted living facility (and subject to the
limitations already outlined).
FACILITY REQUIREMENTS
A maximum of two residents is allowed per unit. At least 80 square feet must be provided per
resident. Living room and dining areas that can accommodate all residents must be provided, with at
least 15 square feet per resident per dining area. One toilet, lavatory, bath and shower is required for
every six residents. All facilities are subject to the regulations of the Americans with Disabilities Act.
Page 20
All new facilities must conform to the current editions of the Standard Building Code, the National
Electric Code, the National Fire Protection Code of the National Fire Protection Association, and the
U.S. Public Health Service Food Code, as regulated by the Board for Licensing Health Care Facilities.
When there is conflict between requirements of these codes and local codes, the most stringent
requirements supersede any others.
Regarding Alzheimer’s unit requirements, facilities in Tennessee are permitted to have secured units
housing residents up to the last stages of the disease, consistent with admission/discharge criteria.
Staff in facilities with secured units must be surveyed in order to gather specific information and
documentation accumulated during the previous 12 months regarding staffing patterns, care provided
and other health-related issues.
STAFFING REQUIREMENTS
An administrator, an identified responsible attendant and a sufficient number of staff must be
employed to meet the needs of residents, including any medical services prescribed. A licensed nurse
must be available as needed. A qualified dietician must be employed by each facility, whether full
time, part time, or on a consulting basis. The responsible attendant, administrator and direct care staff
must be at least 18 years of age.
Administrators must hold a high school diploma or equivalent. Administrators must be without
conviction of a criminal offense involving the abuse or intentional neglect of the elderly or other
vulnerable individual. Additionally, an administrator must be certified by the Board for Licensing
Health Care Facilities, unless the administrator is currently licensed in Tennessee as a nursing home
administrator as required by T.C.A. 63-16-101. Regarding continuing education, administrators must
complete 24 hours every two years in courses related to Tennessee rules and regulations, nutrition and
food service, healthcare management, financial management and healthy lifestyles.
Any staff working in a secured unit must have annual in-service training, including at least the
following subject areas:
Page 21
•
Basic facts about the causes, progression and management of Alzheimer’s disease and related
disorders.
•
Identifying and alleviating safety risks to the resident.
•
Communication with families and others persons interested in the resident.
•
Providing assistance with ADLs for the resident.
•
Dealing with dysfunctional behavior and catastrophic reactions in the residents.
MEDICAID POLICY AND REIMBURSEMENT
Tennessee has both a state-only funded and a Medicaid-funded Home and Community-Based Services
(HCB) Waiver program. Medicaid long-term care services, both HCB and nursing facility care, are
provided under a managed care program called CHOICES. Assisted care living facility services, with
the exception of room and board, are included in CHOICES. Facilities may also provide respite care to
eligible individuals.
REGIONAL ANALYSIS
The subject property is located in Ashland City, a town in Cheatham County, Tennessee. The town
serves as seat of Cheatham County, the third-fastest growing county in the state. The county has a
2011 total population of approximately 40,455 residents. Cheatham County is located in north central
Tennessee, directly west of Davidson County, which is a joint legal entity with the city of Nashville.
Chatham County is considered part of the Nashville-Davidson-Murfreesboro-Franklin Metropolitan
Statistical Area (MSA), which includes 13 middle Tennessee counties. The subject is located
approximately 3.4 miles west of the county/city limits of Davidson County/Nashville and 13.5 miles
northwest of the downtown section of Nashville, the core area of the MSA.
Ashland City is characterized as a bedroom community for Nashville and the greater Davidson County
Area. This is primarily due to the accessibility to the larger metro area. Highway 12 South (Ashland
City Highway) provides direct access from Ashland City to downtown Nashville. The Ashland City
area is more rural and undeveloped in comparison to other Nashville bedroom communities. The
manufacturing industry represents the primary employment source in Cheatham County, with several
Page 22
industrial sites located southeast of the subject along Highway 12 South. However, nearly 60.0% of
Cheatham County residents still commute to the Nashville area for employment. The town of Ashland
City has a 2011 total population of only 4,931 residents, but a significant portion of the population
within Cheatham County is located just outside or in proximity to the town limits of Ashland City.
Page 23
DEMOGRAPHICS
Population Growth
2000
2011
Census
Estimate
Total Population
Ashland City
Cheatham County
United States
65+ Population
Ashland City
Cheatham County
United States
65+ Population, as a % of Total
Ashland City
Cheatham County
United States
75+ Population
Ashland City
Cheatham County
United States
Ashland City
Cheatham County
United States
85+ Population
Ashland City
Cheatham County
United States
Ashland City
Cheatham County
United States
Ashland City
Cheatham County
United States
Ashland City
Cheatham County
United States
Ashland City
Cheatham County
United States
Ashland City
Cheatham County
United States
Ashland City
Cheatham County
United States
Source: Claritas, Inc.
%
Change
2016
Projection
3,641
35,912
281,421,906
4,931
40,455
310,650,750
35.4%
5,330
12.7%
42,216
10.4% 323,031,618
478
3,085
34,991,753
Population
13.1%
8.6%
12.4%
657
4,651
41,346,659
37.4%
50.8%
18.2%
244
1,245
16,600,767
Population
6.7%
3.5%
5.9%
349
1,883
19,087,926
13.3%
11.5%
13.3%
7.1%
4.7%
6.1%
N/A
N/A
N/A
43.0%
51.2%
15.0%
N/A
N/A
N/A
86
128
48.8%
353
502
42.2%
4,239,587
5,846,730
37.9%
Population
2.4%
2.6%
N/A
1.0%
1.2%
N/A
1.5%
1.9%
N/A
Households
1,416
1,913
35.1%
12,878
14,729
14.4%
105,480,101 116,862,390
10.8%
Household S ize
2.57
2.58
0.2%
2.79
2.75
-1.5%
2.67
2.66
-0.4%
Percentage of Homeowners
60.7%
58.4%
-3.8%
83.7%
79.9%
-4.4%
66.2%
66.4%
0.3%
Median Household Income
$35,193
$40,920
16.3%
$45,828
$52,422
14.4%
$42,729
$49,726
16.4%
Median Home Value
$86,926
$123,112
41.6%
$105,552
$155,241
47.1%
$112,467
$172,751
53.6%
796
5,897
47,902,230
14.9%
14.0%
14.8%
375
2,238
20,546,648
7.0%
5.3%
6.4%
%
Change
8.1%
4.4%
4.0%
21.2%
26.8%
15.9%
N/A
N/A
N/A
7.4%
18.9%
7.6%
N/A
N/A
N/A
135
612
6,546,281
2.5%
1.4%
2.0%
5.5%
21.9%
12.0%
N/A
N/A
N/A
2,086
15,420
121,514,895
9.0%
4.7%
4.0%
2.56
2.74
2.66
-0.9%
-0.3%
0.0%
58.5%
79.9%
66.4%
0.1%
-0.1%
0.0%
$41,541
$53,320
$51,097
1.5%
1.7%
2.8%
$135,313
$174,205
$189,669
9.9%
12.2%
9.8%
Page 24
GENERAL POPULATION
Between 2000 and 2011, the population in the U.S. grew 10.4% and is expected to grow 4.0% over the
next five years. From 2000 to 2011, the population in Cheatham County grew 12.7% and is expected
to grow 4.4% over the next five years. During the same period, the population in Ashland City grew
35.4% and is expected to grow 8.1% over the next five years. Over the next five years, the general
population is projected to increase by 399 in Ashland City and increase by 1,761 in Cheatham County.
AGE 75 AND OVER POPULATION
Between 2000 and 2011, the 75 and older population in the U.S. grew 15.0% and is expected to grow
7.6% over the next five years. From 2000 to 2011, the 75 and older population in Cheatham County
grew 51.2% and is expected to grow 18.9% over the next five years. During the same period, the 75
and older population in Ashland City grew 43.0% and is expected to grow 7.4% over the next five
years. However, in aggregate, this represents an increase of only 26 residents. Over the next five
years, the 75 and older population is projected to increase by 355 in Cheatham County.
AGE 85 AND OVER POPULATION
Between 2000 and 2011, the 85 and older population in the U.S. grew 37.9% and is expected to grow
12.0% over the next five years. From 2000 to 2011, the 85 and older population in Cheatham County
grew 42.2% and is expected to grow 21.9% over the next five years. During the same period, the 85
and older population in Ashland City grew 48.8% and is expected to grow 5.5% over the next five
years. However, in aggregate, this represents an increase of only seven residents. Over the next five
years, the 85 and older population is projected to increase by 110 in Cheatham County.
HOUSEHOLDS
Between 2000 and 2011, the households in the U.S. grew 10.8% and are expected to grow 4.0% over
the next five years. From 2000 to 2011, the number of households in Cheatham County grew 14.4%
and is expected to grow 4.7% over the next five years. During the same period, the number of
households in Ashland City grew 35.1% and is expected to grow 9.0% over the next five years. Over
the next five years, the number of households is projected to increase by 173 in Ashland City and
increase by 691 in Cheatham County.
Page 25
HOUSEHOLD SIZE
Between 2000 and 2011, the household size in the U.S. declined 0.4% and is expected to remain
unchanged over the next five years. From 2000 to 2011, the household size in Cheatham County
declined 1.5% and is expected to decline 0.3% over the next five years. During the same period, the
household size in Ashland City grew 0.2% and is expected to decline 0.9% over the next five years.
PERCENTAGE OF OWNERS
Between 2000 and 2011, the percentage of homeowners in the U.S. grew 0.3% and is expected to
remain unchanged over the next five years. From 2000 to 2011, the percentage of homeowners in
Cheatham County declined 4.4% and is expected to remain unchanged over the next five years.
During the same period, the percentage of homeowners in Ashland City declined 3.8% and is expected
to remain relatively unchanged over the next five years.
MEDIAN HOUSEHOLD INCOME
Between 2000 and 2011, the median household income in the U.S. grew 16.4% and is expected to
grow 2.8% over the next five years. From 2000 to 2011, the median household income in Cheatham
County grew 14.4% and is expected to grow 1.7% over the next five years. During the same period,
the median household income in Ashland City grew 16.3% and is expected to grow 1.5% over the next
five years. The median household income in Ashland City is lower than both the medians for
Cheatham County and the United States.
MEDIAN HOME VALUE
Between 2000 and 2011, the median home value in the U.S. grew 53.6% and is expected to grow 9.8%
over the next five years. From 2000 to 2011, the median home value in Cheatham County grew
47.1% and is expected to grow 12.2% over the next five years. During the same period, the median
home value in Ashland City grew 41.6% and is expected to grow 9.9% over the next five years. The
median home value in Ashland City is lower than both the median for Cheatham County and the
United States.
Page 26
EMPLOYMENT
According to the Bureau of Labor Statistics, the Cheatham County labor force decreased from 21,198
in 2007 to 20,669 in 2010. During that same time, the unemployment rate in Cheatham County
changed from 3.7% in 2007 to 5.2% in 2008, 9.4% in 2009 and 9.0% in 2010. As previously
mentioned, approximately 60.0% of Cheatham County residents commute outside of the county
(predominantly to Davidson County/Nashville) for employment. Therefore, the unemployment rate
for Davidson is also relevant to this analysis. In 2010, the unemployment rate in Davidson County was
8.8%. In 2010, the national unemployment rate (9.6%) was higher than both the unemployment rates
for Cheatham (9.0%) and Davidson (8.8%) counties.
The following table summarizes the labor force and unemployment data for Cheatham County:
Historical Labor Force and Unemployment Data
Year
2010
2009
2008
County Labor Force
20,669
20,284
20,472
County Unemployment Rate
9.0%
9.4%
5.2%
National Unemployment Rate
9.7%
9.3%
5.8%
2007
21,198
3.7%
4.6%
Although central Tennessee is still in the process of recovering from the national recession that
resulted in high unemployment levels, current employment statistics for the area indicate that
employment status in Cheatham and Davidson counties are improving. The most recent published
(July 2011) unemployment rate for Cheatham County was 8.5%, which is less than the rate (9.0%) for
2010. In addition, the unemployment rate for Davidson County is only 8.5%, which is also less than
the county’s 2010 estimate. Both of these estimates are less than the national unemployment rate
(9.1%) for the same period. This data is an indication that the economy and the employment situation
in central Tennessee are improving.
Page 27
The largest employers of Cheatham County are summarized in the following table:
Employer
A.O. Smith
Triton Boats LP
Trinity Marine
Homax
Gate Precast Inc.
EMPLOYERS
Number of
Employees
1,200
400
350
180
130
Industry
Water heaters
Boat building
Barge manufactures
Home improvement products
Precast concrete panels
Source: Cheatham County Economic and Community Development
Cheatham County has access to a significant number of large employers in the Davidson
County/Nashville area.
The following table presents the employment by industry in Cheatham County, Tennessee, compared
to the U.S. total:
Employment By Indus try
Industry
U.S. Total
Agriculture, forestry, fis hing and hunting
1.08%
Mining, quarrying, and oil and gas extraction
0.61%
Utilities
0.52%
Cons truction
5.17%
Manufacturing
10.82%
W holesale trade
5.15%
Retail trade
13.63%
Trans portation and warehousing
3.71%
Information
2.55%
Finance and ins urance
2.32%
Real estate and rental and leasing
15.25%
Profess ional and technical services
1.79%
Management of companies and enterprises
5.17%
Administrative and waste services
1.80%
Educational s ervices
7.02%
Health care and s ocial as sis tance
1.75%
Arts , entertainment and recreation
6.96%
Accommodation and food s ervices
10.45%
Other s ervices, except public administration
4.10%
Unclass ified
0.15%
Total, all indus tries
100.00%
Cheatham County
ND
ND
ND
ND
36.22%
ND
13.29%
6.86%
0.44%
ND
ND
1.61%
2.43%
0.97%
ND
ND
6.46%
8.59%
1.37%
NC
100.00%
Source: BLS.gov 2010 Dat a (NC) Not Calculable, t he dat a does not exist or it is zero (ND) Not Disclosable
Page 28
As a percentage of total employment, Cheatham County has a substantially greater manufacturing base
(36.22%) than the U.S. (10.82%).
HOUSING
There is a variety of housing available in Ashland City and the surrounding areas. The average
median home prices are shown in the following table. The subject is located in zip code 37015.
Community
Ashland City
White Bluff
Pegram
Kingston Springs
Pleasant View
Nashville
Nashville
Zip Code
37015
37187
37143
37082
37146
37218
37221
Change From
Change From
Median Home Price Previous Year Previous Quarter
$108,900
-10.5%
-1.1%
$113,600
-3.7%
2.1%
$146,200
-12.5%
1.8%
$151,900
-11.1%
1.1%
$154,000
-5.3%
0.8%
$91,700
-4.4%
2.1%
$187,300
-6.5%
1.7%
S o urc e : Zillo w.c o m
The most significant real estate development within Ashland City in recent years was the construction
of Braxton Condominiums and Marina three years ago. The condominium contains two high-rise
buildings, both containing 200 units and which represent the first high-end waterfront development in
Ashland City.
However, the opening (2008) of the development coincided with the decline in the
national and local housing market. This factor, combined with fraudulent activities committed by the
community’s developer, resulted in eventual default on the project’s loan. In May 2011, Bank of
America and PNC Bank purchased the development at auction for approximately 25.0% ($19 million)
of the cost to construct ($75 million) the community. The bank has since reopened the sales office.
Given that the units are of high quality construction, combined with reduced sales prices, it is
anticipated that the bank will eventually sell out the development.
The difficulty experienced by this condominium development does not reflect the current condition of
the Ashland City housing market, which displays some indications of stabilizing. According to
information provided by Movoto.com, there are currently 133 residential home sales in September
2011 in the Ashland City area. This estimate is 17.0% less than the comparable estimate for September
Page 29
2010. This reflects that 274 residential homes have sold in 2011 or are under contract to sell. In
addition, homes are typically on the market for only 94 days. These findings indicate that homes are
selling in the Ashland City area. In addition, based on the data in the following chart, home sale prices
appear to be stabilizing:
The median housing value for the third quarter of 2011 is slightly less than $140,000, which is similar
to the median housing values for the periods prior to the decline in the local housing market in late
2008. While the decline in the housing market is the primary reason for the condominium not selling
out, the poor management of the previous developer also contributed to this situation.
TRANSPORTATION
Ashland City and Cheatham County residents have access to good transportation linkages to
surrounding areas. The proposed subject site has frontage on Highway 12 South (Ashland City
Highway), which offers direct access southeast to Nashville. Cheatham County is served by three
Page 30
exits off of U.S. Interstate 24, the closest of which is located approximately 10.6 miles northwest of
the subject. U.S. Interstate 24 provides access northwest into Clarksville and southeast to Nashville.
U.S. Interstate 40 is located approximately 11.8 miles south of the subject in southern Cheatham
County. From this location, the highway provides access northeast to Nashville and southwest to
Memphis, Tennessee.
Rail transportation is provided to Ashland City industry by The Nashville & Western Railroad Corp., a
division of The Nashville & Eastern Railroad Corp.
Passenger airline transportation is provided by Nashville International Airport, located 19 miles
southeast of the subject.
EDUCATION
The city is served by the Cheatham County School District, operating six elementary schools, three
middle schools and three high schools. Colleges and universities within proximity to the subject
include American Baptist College, Aquinas College, Austin Peay State University, Belmont
University, David Lipscomb University, Fisk University, Nashville State Technical Community
College, Tennessee State University and Vanderbilt University.
HEALTHCARE
HOSPITALS
The following is a summary of acute-care hospitals within a 15-mile radius of the subject:
Centennial Medical Center at Ashland City is designated as a Critical Access Hospital (CAH) through
a federal program designed to ensure rural populations have access to local hospital care. Under CAH,
Centennial Medical Center at Ashland City offers 12 inpatient beds to treat patients with non-life
threatening illnesses, diagnostic services and 24-hour emergency care.
Page 31
Facility
Centennial Medical Center at Ashland City
Saint Thomas Hospital
Centennial Medical Center
Nashville General Hospital at Meharry
Vanderbilt University Hospital
Baptist Hospital
Total
Beds
12
490
580
114
633
450
2,279
Approximate Distance
from Subject (Miles)
2.6
12.5
13.6
13.8
14.1
14.9
Source: www.ahd.com
Diagnostic services include a full service laboratory, medical imaging, digital radiology, endoscopy,
CT scanning, ultrasound and mammography. The hospital also contains a blood bank and offers
outpatient infusion services.
Given the limited nature of a CAH, Cheatham County residents are required to travel outside of the
area if they require significant acute-care medical and surgical services. The closest acute-care hospital
to the subject is Saint Thomas Hospital in Nashville. Saint Thomas Hospital is a 490-bed facility that
provides adult specialty healthcare to the residents of Middle Tennessee. The hospital is part of Saint
Thomas’ regional health system, which consists of five hospitals: Baptist and Saint Thomas Hospitals,
the Center for Spinal Surgery in Nashville, Middle Tennessee Medical Center in Murfreesboro and
Hickman Community Hospital in Centerville.
Saint Thomas Hospital offers acute-, critical and specialty care with 1,700 associates, 750 affiliated
physicians, 21,388 total admissions per year and 32,000 ER visits per year. Distinctive services at
Saint Thomas Hospital include nationally-recognized cardiac services from more than 60 specialists of
Saint Thomas Heart, cardiothoracic surgery, accredited heart failure unit, accredited chest pain center
and emergency services department, critical and special care, ambulatory and outpatient surgery,
diabetes center, general medicine, general surgery, Maria Nathanson Center for Excellence for Renal,
Pulmonary and Gastroenterology Disorders, mental health care unit, nephrology, transplantation
department - cardiac and kidney, accredited stroke center, outpatient neurosurgery center and more.
Page 32
In addition, Ashland City residents have good access to Vanderbilt University Hospital (VUH). VUH
is located 14.1 miles southeast of the subject and is part of the greater Vanderbilt University Medical
Center (VUMC). VUH is a 633-bed acute-care teaching hospital that is supported by research-based
medical and nursing schools. It delivers routine outpatient and inpatient care as well as highly
specialized medical and surgical procedures. The hospital is the area’s only Level I Trauma Center. In
addition to VUH, VUMC includes Monroe Carell Jr. Children’s Hospital, The Vanderbilt Clinic, The
Vanderbilt-Ingram Cancer Center, The Psychiatric Hospital of Vanderbilt, Vanderbilt Stallworth
Rehabilitation Hospital, Nashville Veterans’ Administration Medical Center, The Vanderbilt School of
Medicine, The Vanderbilt School of Nursing and other research and educational facilities. In 2010, the
system accumulated more than 1.5 million patient visits and more than 53,000 patients were admitted
to the Vanderbilt hospitals. VUH is consistently recognized as one of the nation’s top hospitals by
organizations such as U.S. News & World Report and Reuters.
SKILLED NURSING
The following is a summary of skilled nursing facilities within proximity to the subject:
Facility
Hillcrest Healthcare
Christian Care of Cheatham County
Total
Beds
95
80
175
Approximate Distance
from Subject (Miles)
1.5
6.1
Source: medicare.gov
HOME HEALTHCARE
The following is a summary of home healthcare providers within proximity to the subject:
HOME HEALTHCARE SERVICES PROVIDERS
Homewatch CareGivers
Intrepid Healthcare Services
Suncrest Home Health
Page 33
The healthcare and alternative housing options listed above do not significantly compete with the
subject.
Home health providers are Medicare certified agencies that have met federal minimum requirements
for patient care and management and therefore, can provide Medicare and Medicaid home health
services. Individuals requiring skilled home care services usually receive their care from a home
health agency.
Due to regulatory requirements, services provided by these agencies are highly
supervised and controlled. Some agencies deliver a variety of home care services through physicians,
nurses, therapists, social workers, homemakers and HCAs, durable medical equipment and supply
dealers, and volunteers. Other home health agencies limit their services to nursing and one or two
other specialties. For cases in which an individual requires care from more than one specialist, home
health agencies coordinate a care-giving team to administer services that are comprehensive and
efficient. Personnel are assigned according to the needs of each patient. Home health provides skilled
nursing, physical therapy, occupational therapy, medical social work, speech/language pathology,
respiratory therapy and personal care services, in accordance with a physician-authorized plan of care.
Where only personal care services are delivered, unlicensed personnel may be utilized under the
supervision of an RN and physician's orders are not required. Agencies may be licensed and certified
(meet Medicare standards and must be utilized for this payor source) or licensed (meet state standards
of care and may be utilized for other payor sources). An interview with local discharge coordinators
revealed that discharged elderly patients typically return home to where they were before admission or
are placed at a facility based on the patient’s needs.
CONCLUSION
Ashland City and Cheatham County are both projected to continue to experience increases in total and
senior populations, as both areas continue to transition into suburban bedroom communities of
Nashville. Ashland County is strengthened by its proximity to the Davidson County/Nashville area,
which provides Ashland City residents with access to a significant number of large employers and
residentially supportive commercial, healthcare and retail services. Overall, the above factors will
result in increasing demand for assisted living and memory care assisted living services in the area.
Page 34
NEIGHBORHOOD ANALYSIS
Neighborhoods may be devoted to one or more uses such as residential, commercial, industrial,
agricultural, and cultural and civic activities. Analysis of the neighborhood in which a particular
property is located is important due to the fact that various economic, social, political and physical
forces that affect a neighborhood also directly influence the individual properties within it. An
analysis of these various factors as they affect the subject property is presented in the following
discussion.
The subject property will be located along the north side of Highway 12 South in the town of Ashland
City, within Cheatham County, Tennessee. The subject’s site will share an access road (Vantage
Pointe Road) with an existing multifamily apartment complex (VantagePointe Homes at Marrowbone
Heights) that is owned by the developer of the subject. Highway 12 South is the primary east/west
roadway through Ashland City and Chatham County and connects the area to the city of Nashville to
the east. The subject’s immediate neighborhood contains a significant amount of undeveloped rolling
land. The majority of development in the subject’s area is located along Highway 12 South. Given this
factor, the subject’s neighborhood is defined as a one-mile radius from the subject. The following
describes the land uses around the subject:
North (Northwest)
East (Northeast)
— Sycamore Place Apartments, a multifamily apartment complex that was
built in 2003 and is in good condition.
— Vacant land to the south and VantagePointe Homes at Marrowbone
Heights to the southeast. VantagePointe Homes at Marrowbone Heights
is a multifamily apartment complex that was built in 2010 and is in
excellent condition. The apartment complex is owned by the subject’s
developer.
— VantagePointe Homes at Marrowbone Heights and vacant land.
West
— Vacant land.
South
A large portion of the subject’s neighborhood includes rolling and vacant forest land. The area also
contains some significant residential and commercial land uses. The subject is bordered to the north,
east and southeast by multifamily apartment complexes. There are also clusters of single-family
residential homes in average to good condition located southeast of the subject off of Little
Page 35
Marrowbone Road and Williamsburg Road, respectively. In addition, a major shopping center is
located approximately 0.4 miles northwest of the subject along Highway 12 South. This shopping
center is anchored by a Walmart Supercenter. The subject is also located approximately two miles
south of the downtown section of Ashland City, which is positioned along Highway 12 South.
Immediately south of the subject’s neighborhood, the development along Highway 12 South
transitions to commercial and industrial land uses.
The subject and its surroundings are included in the following photograph:
Subject Site
Page 36
The neighborhood services and amenities map and table are presented below:
Amenities and Services
Amenity/Service
Description
Walmart Phamacy
Pharmacy
Bank of America
Bank
Ashland Senior Center
Senior Services
Centennial Medical Center at Ashland City
Hospital
Saint Thomas Hospital
Hospital
Vanderbilt University Hospital
Hospital
Nashville (Downtown)
Major Employment Center
Distance (in Miles)
0.5
1.9
2.6
3.1
12.5
14.1
13.5
Every neighborhood has a dynamic quality of its own. This quality can be described as the life cycle
of the neighborhood. There are four stages that a neighborhood will typically encounter. These
phases, in the order in which they typically appear, are defined below.
Page 37
Growth – a period during which the neighborhood gains public favor and acceptance
Stability – a period of equilibrium without marked gains or losses
Decline – a period of diminishing demand
Revitalization – a period of renewal, modernization and increasing demand
The complementary land uses that comprise a neighborhood typically evolve around these four stages.
These four stages describe the neighborhood in a general way and are not a specific guide to market
trends. No set number of years is assigned to any of the cycles and a neighborhood can remain in a
cycle for many years.
The subject’s neighborhood is in the growth phase of its life cycle. This is evidenced by the
development of the new multifamily apartment complex (VantagePointe Homes at Marrowbone
Heights) adjacent to the subject. The subject’s area has experienced moderate increases in population
in the last decade. This trend is projected to continue over the next five years as Ashland City
continues to grow into a bedroom community of Nashville.
A neighborhood is affected by social factors that determine why people reside and work in the area.
Potential residents and workers are attracted or put off from a neighborhood based upon its status,
physical environment, services, affordability, safety and convenience. The subject’s neighborhood is
transitioning from a rural to suburban area and has a good mixture of land uses. The neighborhood
has good linkage via major roadways and interconnecting interstates, which provide access to
neighboring communities.
The subject is located approximately 3.4 miles northwest from the
county/city limits of Davidson County/Nashville, a major metropolitan area. The subject is also
located approximately 13.5 miles northwest of the downtown section of Nashville. Ashland City is
characterized as a developing bedroom community of Nashville.
Economic considerations relate to the financial capacity of a neighborhood’s occupants. Some of
these considerations include the ability of residents to rent or own property, the ability to adequately
maintain property and the ability to make repairs or renovations to property as needed. Residential
Page 38
housing in the neighborhood is single-family residential. Most improvements are in good condition
and adequately maintained. There appear to be no adverse effects on the subject’s neighborhood due
to economic conditions.
Governmental considerations relate to the laws, regulations and taxes that are imposed on a
neighborhood’s properties. The more desirable these attributes, the more desirable the neighborhood
becomes. Real estate tax rates appear to be in line with neighboring communities, and do not pose as
an adverse effect on the neighborhood. Regulations regarding zoning and land use are dictated by the
Town of Ashland City.
There appear to be no adverse effects on the neighborhood due to
governmental considerations.
The final consideration one must give to a neighborhood focuses on environmental issues. These
consist of man-made or natural features of the neighborhood that include building sizes, neighborhood
density, topographical features, adequacy of public utilities, and nuisances and hazards emanating
from nearby properties. The subject’s neighborhood is composed of rolling terrain as is typical of this
area. There appear to be no adverse effects on the neighborhood due to environmental considerations.
In conclusion, the neighborhood provides adequate services and amenities needed to support a senior
care facility. The neighborhood is transitioning from a rural to suburban area and the subject is within
convenient proximity to neighborhood commercial services and medical centers. Overall, the subject
neighborhood is a good location for a senior living facility.
FACILITY OVERVIEW
The subject is a proposed senior living community. The quality of construction will be good and the
conditions of the improvements are assumed to be new.
The following is a summary of room types and anticipated room rates by unit and accommodation
type:
Page 39
Facility Inventory and Monthly Rents
Unit Type
Assisted Living
Studio
Studio
One-Bedroom
Two-Bedroom
Subtotal/Weighted Average
Memory Care
Size
Units
Beds
Monthly
Rents
404
458
632
749
531
16
18
20
6
60
16
18
20
6
60
$2,981
3,194
3,498
3,741
$3,293
Studio - Private
Studio - Private
Sub-Total Weighted Averge
Total/Weighted Average
404
458
N/A
N/A
10
10
20
80
10
10
20
80
5,019
5,323
$5,171
$3,763
The traditional and memory care assisted living units will include kitchenettes equipped with a small
refrigerator, sink and microwave, wireless internet access, emergency response system, wall-to-wall
carpeting, individually controlled heat and air-conditioning systems and private patios on select floor
plans. Memory care assisted living units will also have passive motion detected “check-in” systems.
Three of the assisted living two-bedroom units will be licensed to provide double occupancy
(couples). Given this factor, the facility will have the licensed capacity for 86 residents although it is
projected to operate only 80 beds.
The traditional assisted living monthly rate will include three complete meals daily, housekeeping,
scheduled transportation, utilities (excluding telephone and cable) and maintenance. Residents of
traditional assisted living facilities who require more personal care assistance, based upon a resident
assessment, can purchase additional levels of care. The above displayed rates are for the subject’s base
level (Level I) of care. The subject will offer two additional levels of care for an extra monthly cost of
approximately $300 for Level II and $450 for Level III. The memory care units will be located on
the second floor of the building with secure access points for the protection and safety of the
memory care residents. This area will have its own keypad entrances, a dining room and activity,
exercise and recreational areas. The memory care assisted living unit monthly rate will include all of
the services provided to traditional assisted living residents as well as personal assistance with
Page 40
activities of daily living as needed, self-administered medication management and personal laundry
services. The above displayed rates for the base level (Level I) of memory care assisted living
services. The subject will offer a second level for an additional month fee of $300.
The subject’s amenities will include, but will not be limited to, an on-site beauty salon, a library,
resident lounges, social and activity areas, and exercise areas.
MANAGEMENT OVERVIEW
Since the successful operation of a going concern is dependent upon effective management, a perusal
of facility management can provide an indication of the potential for growth or the risk of achieving
budgeted cash flows. Professional management with a high level of experience and expertise can
improve the stability of operations, reducing the risk associated with the assets.
The subject facility will be developed, owned and managed by Ashland Heights, L.P. (the developer).
The principals of the developer have up to 40 years of experience in developing and managing senior
living facilities. The experience of the developer will contribute to the success of the subject.
This includes the management and ownership of several other senior housing communities in the
southern portion of the U.S. The principals are part of a regional partnership with Plantation South,
which operates eight assisted living communities in Florida and three assisted living facilities in
Georgia. In addition, the principals of the developer also own and operate two additional assisted
living facilities (The Terrace at Grove Park and the Terrace at Priceville) in Alabama and have also
developed and sold assisted living properties to larger senior housing developers such as Atria Senior
Living. The principals of the developer are also in the process of developing two additional senior
living facilities in Alabama.
Page 41
SITE DESCRIPTION
SITE CHARACTERISTICS
Location
— The subject site will be part of two existing parcels that are identified by the
Cheatham Assessor as Parcels 062-013.04 and 062.013.05. Upon completion of
the subject, a new parcel number will be assigned to the subject site as created
from pieces of these parcels. A plat map is contained in the addendum.
Access
— The subject will share an access road with VantagePointe Homes at Marrowbone
Heights, a multifamily apartment complex that is owned by the developer of the
subject. The access road, which is known as Vantage Pointe Road, is positioned
along the north side of Highway 12 South. Highway 12 South is a well-traveled
two-lane divided highway. However, Vantage Pointe Road can be accessed from
both sides of Highway 12 South.
Visibility
— The subject site will possess signage and excellent visibility along Highway 12
South.
Frontage
— The subject’s site will have approximately 355 feet of frontage along Highway 12
South.
Size/Shape
— The subject is 191,882 square feet (4.405 acres) and is irregular in shape.
TOPOGRAPHY AND DRAINAGE
The subject’s site slopes upward to the east, but drainage is assumed to be adequate.
SOILS HAZARDS
No information was received regarding the condition of the subsoils. No unusual soil conditions were
reported by Management. No negative impact on property values due to soil conditions is assumed to
exist.
FLOOD ZONE
The subject is located in Flood Zone X (community map and panel number 47021C0210C, effective
December 9, 1999) and is located within a flood hazard area. Zone X is defined by FEMA as an area
of moderate flood hazard, usually the area between the limits of the 100-year and 500-year floods.
Zone X is also an area determined to be outside the 500-year flood and protected by levee from the
100-year flood. A FEMA flood map displaying the subject’s location is as follows:
Page 42
Subject
UTILITIES
All typical city services exist and are available to the subject site, including sewer, water, gas,
electricity, sanitation, and fire and police protection.
ZONING
According to the Ashland City Department of Codes and Building Safety, the proposed parcel is part
of a Planned Unit Development (PUD). The PUD is specific to the proposed subject as well as the
existing adjacent multifamily apartment complex (VantagePointe Homes at Marrowbone
Heights). A copy of the PUD agreement is included in the addendum to this report. According to
Michael Armstrong, the city’s Building and Coding Official, there are no specific zoning regulations
or development restrictions for a PUD in Ashland City. All proposed uses and development
Page 43
restrictions are plan specific and determined by the proposed developer. The town’s planning
commission will review the specifics of the subject’s final development plan upon availability. Based
on these factors, Mr. Armstrong indicated that the subject would be a legal, conforming use.
Given that the subject’s site and building plans are still under development, no specific development
characteristics were included in this report.
EASEMENTS/ENCROACHMENTS/RESTRICTIONS
A property profile of the subject property was not reviewed. It is assumed typical easements exist and
provide for availability of utilities such as water, gas and electricity. The easements are deemed to be
of the type normally found on a developed parcel and therefore do not adversely affect the
marketability of the subject site.
ASSESSMENT AND TAXES
The subject site is currently not subject to real estate taxes as it is part of Parcel Numbers 062-013-04
and 05. According to the Cheatham County Property Appraiser, a new parcel number will be assigned
to the subject site as created from portions of the two parcels. The Cheatham County Assessor stated
that assessed values for land are equal to 25.0% market value. However, for commercial uses such as
an assisted living facility, assessed value equates to 40.0% of market value. This property was last
appraised/assessed in 2007. The next reassessment is scheduled for 2014.
ESTIMATED ASSESSMENT AND TAXES
In order to estimate taxes for the proposed subject facility, the assessed values of comparable
properties have been compared. However, since there are no existing assisted living facilities in
Cheatham County, three comparable assisted living facilities in Nashville/Davidson County were
utilized in this analysis. Assisted living facilities in Davidson County are also assessed at 40% of
market value. The following table details these findings:
Page 44
Facility
1) The Waterford in Bellevue Senior Living
2) The Cumberland at Green Hills
3) Belmont Village
Statistical Indications
Minimum
Maximum
Mean
Median
Number
of Beds
74
115
115
Size
(SF)
43,012
206,367
103,784
Year
Built
2002
2007
1999
Assessed
Value
$1,999,800
$7,063,520
$4,452,600
Assessments
Per SF
Per Unit
$46.49
$27,024
$34.23
$61,422
$42.90
$38,718
74
115
101
115
43,012
206,367
117,721
103784
1999
2007
2003
2002
$1,999,800
$7,063,520
$4,505,307
$4,452,600
$34.23
$46.49
$41.00
$42.90
$27,024
$61,422
$42,388
$38,718
2011 assessed value
The comparable assessments range from $34.23 to $46.49 per square foot with a mean of $41.00 per
square foot. According to the Cheatham County Assessor, upon completion, the subject property will
be appraised based on the estimated cost to construct the facility and will be assessed at 40%. The
subject will be new construction, and an amount above the range is appropriate. Based on the size, age
and locations of the comparable tax assessments, an assessment of $50 per square foot is reasonable.
The 2010 tax rate is $3.25 per $100 of assessed value. A property tax estimate of $132,000 per year is
utilized in the analysis. The following table presents the real estate tax estimate:
Estimated Assessment and Tax Liability
Total Square Footage
81,252
Est. Assessment Per Sq. Ft.
$50
Estimated Assessment
$4,062,600
Tax Rate Per $100
3.25
Estimated Real Estate Taxes
$131,953
$132,000
Rounded
IMPROVEMENTS DESCRIPTION
BUILDING
Detailed building plans for the subject were available for review.
The following is based on
discussions with the developer. It is assumed that all information provided by the Developer is
correct.
Page 45
A detailed description of the subject is summarized below:
GENERAL INFORMATION
Quality of Construction
expected to be good
General Condition
new
Number of Stories
4
Size
81,252 square feet
Date of Construction
proposed
GENERAL CONSTRUCTION
Site Preparation
general leveling and grading
Foundation
concrete slab
Frame
wood
Exterior Walls
stone
Floors
concrete slab on grade
Roof
hip-style wood roof with composition shingles
FINISH CONSTRUCTION
floor finishings will be a combination of carpet, ceramic tile
and vinyl tile; interior walls and ceilings will be drywall
MECHANICAL EQUIPMENT
complete details on the mechanical systems are not yet
available from the developer; the community will have two
elevators, will be fully sprinklered and will contain an
emergency generator; each resident unit will have
individually controlled thermostats
LAYOUT
The subject will be an L-shaped building located along the western and northern borders of the subject
site, with direct frontage on Highway 12 South. The building will include four stories, with the main
entrance located along the east side of the building. The first floor of the building will include two
dining areas, the main kitchen, a central lobby and vestibule, a library, resident lounges, social and
activity areas, an exercise room, a beauty parlor, a limited number of non-memory care assisted living
resident units, laundry facilities, administrative areas and mechanical rooms. The second floor will
predominantly consist of resident units and supporting ancillary rooms as well as the memory care
assisted living wing. The memory care assisted living wing will also consist of an activity area, dining
Page 46
room and nurses’ station. The third and fourth floors will consist of non-memory care assisted living
resident units and supporting ancillary rooms.
A copy of the proposed site and floor plans is contained in the addendum. The subject will consist of
the following type and number of rooms:
Facility Inventory and Monthly Rents
Size
Units
Beds
Monthly
Rents
Assisted Living
Studio
Studio
One-Bedroom
Two-Bedroom
Subtotal/Weighted Average
Memory Care
404
458
632
749
531
16
18
20
6
60
16
18
20
6
60
$2,981
3,194
3,498
3,741
$3,293
Studio - Private
Studio - Private
Sub-Total Weighted Averge
404
458
N/A
N/A
10
10
20
80
10
10
20
80
5,019
5,323
$5,171
$3,763
Unit Type
Three of the assisted living two-bedroom units will be licensed to provide double occupancy
(couples). Given this factor, the facility will have the licensed capacity for 86 residents although it is
projected to operate only 80 beds.
SITE IMPROVEMENTS
Parking will be positioned in the southeastern section of the site, directly east of the main portion of
the subject’s improvements. The subject’s site will be improved with 60 parking spaces, including 16
covered parking spaces and three handicapped parking spaces. Other site improvements will include
concrete walks, signage and mature landscaping surrounding the structure.
Page 47
DEPRECIATION
PHYSICAL
Upon completion, the subject will be a newly constructed facility in good condition and will require
no significant renovations or repairs other than routine maintenance in the near future.
FUNCTIONAL
The overall utility of the proposed design of the subject improvements is not expected to have
functional obsolescence.
ECONOMIC/EXTERNAL
No adjacent land uses appear detrimental to the use of the subject. Elderly demographics indicate the
potential for relatively stable future demand. No alternative use is suggested that would generate a
higher net return to the land.
INTANGIBLE AND OTHER ASSETS
Intangible and other assets typical in a going concern include, but are not limited to, an assembled
workforce, systems and procedures, medical records, noncompete agreements and other contracts,
licenses, referral sources, CON, waiting lists, management and marketing plans.
EQUIPMENT
The equipment will be a normal complement of items (e.g., care supplies, resident furnishings, office,
and residential washers and dryers, kitchen, dining and activities) necessary to serve an assisted living
and memory care assisted living facility. A detailed inventory of the equipment is beyond the scope of
this assignment. The equipment is expected to be of adequate quantity and quality to serve resident
needs.
Page 48
SUMMARY
The subject improvements will comprise an assisted living facility. The improvements will be of good
quality and the condition will be new. The subject will be well suited to provide assisted living
services.
MARKET AREA
The primary market area (PMA) is defined as the geographic area from which 70% to 90% of
residents will originate. The remaining 10% to 30% of the residents will originate from outside the
PMA, called the secondary market area (SMA). Properly identifying the PMA is a critical component
of a feasibility study. Factors influencing PMA boundaries are social, income difference, physical
barriers and land use patterns.
In heavily developed urban areas, 70% to 90% of the residents often originate from within the local
city or within a five- to 10-mile radius. This covers a considerably smaller area than a less developed
community, which typically has 70% to 90% of residents originating from an entire county or within a
15- to 20-mile radius.
RESEARCH AND FINDINGS
In order to determine the PMA, local real estate, governmental and senior housing experts were
consulted. The subject is located in the town of Ashland City, which is positioned in the east central
section of Cheatham County, approximately 2.6 miles west of the Cheatham County/Davidson County
border. The boundaries for Davidson County are also the city limits of Nashville, the largest city
within the state of Tennessee. Nashville is the economic, entertainment, healthcare and retail hub of
central Tennessee. A map displaying the subject’s location in proximity to the other central Tennessee
communities is as follows:
Page 49
Approximately 60.0% of all Cheatham County residents commute to Nashville for employment. Given
this factor, Cheatham County is considered to be a bedroom community to Nashville. However, the
area is significantly less developed and populated than Nashville and is predominantly rural in nature.
In addition, the western and northwestern portion of Davidson County/Nashville that borders
Cheatham County is lightly developed. The county/city becomes significantly more developed east of
Old Hickory Boulevard and Eaton’s Creek Road, approximately 6.7 miles east of the subject. There
are several existing assisted living communities located east and south of this roadway in the more
Page 50
developed sections of Nashville. According to professionals from these communities, although these
facilities occasionally draw residents from Ashland City, it is highly unlikely that Nashville residents
would consider traveling west to the town when seeking senior living services. Given this factor, the
majority of Davidson County/Nashville is excluded from the subject’s PMA.
Ashland City represents the most developed section of Cheatham County, which, as a whole, only
contains approximately 40,455 residents. However, there are no existing assisted living or memory
care assisted living communities located in Cheatham County and the subject will represent the closest
community for the majority of Cheatham County residents. The only other significant communities
located in Chatham County are the small towns of Pleasant View, Pegram and Kingston Springs.
Pleasant View is located in the northeastern section of Chatham County, approximately 10 miles
northeast of the subject. However, the area is easily connected to Ashland City by State Route 49 and
the subject would represent the closest assisted living community to Pleasant View residents. Given
this factor, Pleasant View is considered part of the subject’s PMA.
Both Pegram and Kingston Springs are located in the southern section of the county in proximity to
U.S. Route 70 and U.S. Interstate 40, which are located a minimum of 9.3 miles southwest and 11.8
miles south of the subject, respectively. Both roadways provide easy access to Davidson County and
the southwestern section of Nashville.
This area has several well established assisted living
communities. Given this factor, the majority of Pegram and Kingston Springs is excluded from the
subject’s PMA.
Cheatham County is bordered to the north by Robertson County, to the northwest by Montgomery
County, to the southwest by Dickson County and to the south by Williamson County. Robertson
County (68,583 residents in 2011) and Dickson County (48,939 residents in 2011) are both more
populated than Chatham County (40,455 residents in 2011) and contain a moderate number of assisted
living communities.
In addition, Robertson County residents are likely more oriented towards
Nashville when seeking healthcare and senior living services outside of their areas of origin. Given
these factors, the subject is not projected to attract a significant number of residents from either of
these counties.
Page 51
Montgomery County (162,362 residents in 2011) is significantly more populated than Chatham
County, and there are a moderate number of assisted living communities located in the county’s most
significant community, the city of Clarksville. In addition, the northwestern most portion of Chatham
County is easily connected to the Clarksville area by U.S. Interstate 24. Based on this assumption, the
portion of Chatham County located northwest of Pleasant View is excluded from the subject’s PMA.
Williamson County (184,602 residents in 2011), in particular the northern portion of the county,
consists of affluent suburban communities of Nashville. These areas appear to possess an adequate
number of senior living communities. In addition, residents of these communities would have easy
access to several assisted living communities located in southern and southwestern Nashville. Given
this factor, Williamson County will not represent a significant source of residents to the subject.
Based on the above analysis, the PMA for the subject predominantly encompasses the majority of
Cheatham County (Ashland City and Pleasant View) and the portion of Davidson County located west
of Old Hickory Road and Eaton’s Creek Road. The PMA is defined as the area within the following
boundaries:
•
North Border – U.S. Interstate 24.
•
West Border –The approximate western borders of Pleasant View (Oaklawn Road, Mosley
Ferry Road and Issac Clifton Road), Highway 12 North, and the Cheatham County line.
•
East Border – Old Hickory Road and Eaton’s Creek Road and the Cheatham County/Dickson
County border.
•
South Border – U.S. Route 70.
The boundaries include the communities of Ashland City, Pleasant View, the northern section of
Pegram and Kingston Springs, and a small portion of northwestern Davidson County/Nashville. A
map displaying the PMA is as follows:
Page 52
The SMA for the subject is estimated to consist of the PMA plus the remaining portion of Cheatham
County.
Page 53
ASSISTED LIVING/MEMORY COMPETITION
In order to estimate the demand for beds and units, present and future supply and demand within the
subject’s PMA has been analyzed. This assessment is being used to determine the demand.
This market study presents existing facilities that are analyzed in order to determine the existing
supply.
Local government officials, including the planning and building permit office, were
interviewed to determine future supply. A search for existing competition consisted of interviews with
administrators and/or marketing directors and research of assisted living and memory care assisted
living facilities and facility information obtained from the Tennessee Department of Health,
NewLifestyles.com, SeniorHousingFinder.org, SeniorHousing.net and various senior housing internet
search engines.
Facilities are considered competitive if they have more than 20 beds. Smaller facilities are not directly
competitive, as they typically offer fewer services and amenities.
There are no comparable senior living facilities located with the subject’s PMA. The subject will
represent the only significant assisted living and memory care assisted living provider in Cheatham
County and will have no competition for residents within its PMA. For the purpose of this analysis,
eight assisted living communities located outside of the PMA were profiled as comparable facilities.
All of these communities are located within Davidson County/Nashville. One of these facilities
(Barton House) only provides memory care assisted living services and four of the remaining facilities
include both non-memory care and memory care assisted living beds.
A map indicating the location of each facility is presented below:
Page 54
1)
3)
5)
7)
Homewood Residence at Brookmont Terrace
Barton House
Burton Court at Blakeford
Belmont Village
2)
4)
6)
8)
The Waterford in Bellevue Senior Living
Mary Queen of Angels
The Cumberland at Green Hills
Morningside of Belmont
Profiles of the subject and the competition are presented on the following pages:
Page 55
Competitor 1
General
Street Address:
6767 Brookmont Terrace
City, State, Zip:
Nashville, TN 37205
Contact Person:
Nicole Baily, Marketing Manager
Telephone Number: (615) 353-1990
Distance to Subject: 13.3 miles southwest
Owner:
CNL Retirement
Operator: Brookdale Senior Living
Operations
Number of Licensed
Beds
Number of Operating
Beds
Other types of units available:
Stories
Constructed
Quality
Condition
Unit Type:
2&3
2000
Average
Good
Building
Design
Visibility
Access
Neighborhood
Residential
Average
Average
Suburban
Independent Living Unit Sizes & Rates*
Size (SF)
Monthly Base Rate
IL
N/A
N/A
SN
MC
* As o f the e ffe c tive da te o f va lue , 09/07/2011
CC/IN
Services Provided in Traditional AL Basic Rate
Three Daily Meals
Utilities
Weekly Housekeeping
Maintenance
Laundry - Linens
Furnished Room
Laundry - Personal Items
Activities
Scheduled Transportation
Social Services
Other Services Provided
Medication Mgmnt.
Secured Alzheimer's
Therapies
Beauty/Barber Shop
Hospice
Other
Respite
Personal Care Rate Structure
Type of Rate Structure
AL Unit Sizes & Rates*
Unit Type:
Size (SF)
Monthly Base Rate
Shared
N/A
N/A
Studio
N/A
$2,950 to $4,130
1 Bedroom
400
$4,775 to $4,995
2 Bedroom
N/A
N/A
Memory Care Shared N/A
$4,055
Memory Care Private N/A
$5,190
Other
N/A
N/A
AL
184
99
Entrance Fee
2nd Occupant
Tiered
Other Fees
N/A
Community Fee $2,500
$675
Payor Mix:*
Private
100%
Medicaid
0%
SSI/Other
0%
Total
100%
Occupancy Statistics
AL
93
Occupancy
93.9%
IL
N/A
Occupancy
N/A
*As o f the e ffe c tive da te o f the re po rt
Comments:
Homewood Residence at Brookmont Terrace is licensed for 184 assisted living beds, but only operates 99 beds within 95
units. This indicates that while the facility is configured to offer some semiprivate accommodations, the community typically
only offers private rooms. Total operating units include 34 memory care assisted living units (38 beds). The assisted living
portion of the facility is currently 93.4% (57 residents) occupied and the memory care assisted living facility is currently
94.7% occupied (36 residents). The above displayed rates for the facility are for the base level of care. The facility offers
four additional levels of care for an extra monthly fee ranging from $470 to $1,715 per month. This facility is located in the
southwestern section of Davidson County/Nashville and will only indirectly compete with the subject for residents.
IL-Inde pe nde nt, AL- As s is te d Living, M C - M e m o ry C a re As s is te d Living, S N - S kille d Nurs ing, S N ALZ - Nurs ing Alzhe im e r's , N/A -No t Applic a ble
Page 56
Competitor 2
General
8118-B Sawyer Brown Road
Street Address:
Nashville, TN 37221
City, State, Zip:
Cheryl Burns, Marketing
Contact Person:
Telephone Number: (615) 646-2544
Distance to Subject: 12.1 miles southwest
Owner:
Blackstone
Operator: Emeritus Senior Living
Operations
Number of Licensed
Beds
Number of Operating
Beds
Stories
Constructed
Quality
Condition
2
2002
Good
Good
Building
Design
Visibility
Access
Neighborhood
Residential
Average
Average
Suburban
IL
N/A
N/A
SN
MC
AL
74
69
CC/IN
Three Daily Meals
Utilities
Weekly Housekeeping
Maintenance
Laundry - Linens
Furnished Room
Activities
Social Services
Medication Mgmnt.
Secured Alzheimer's
Therapies
Beauty/Barber Shop
Hospice
Other
Respite
Monthly Base Rate
Unit Type:
Size (SF)
Shared
$2,745
Studio
N/A
$3,800 to $3,900
1 Bedroom
N/A
$4,000
2 Bedroom
N/A
Memory Care Shared
$3,845 to $4,600
Other
Entrance Fee
2nd Occupant
Tiered
Other Fees
N/A
Community Fee $2,500
$675
Payor Mix:*
100%
Private
0%
Medicaid
0%
SSI/Other
100%
Total
69
AL
Occupancy
100.0%
N/A
IL
N/A
Occupancy
*As o f the e ffec tive da te o f the re po rt
Comments:
Emeritus Senior Living began managing this facility approximately one year ago. The Waterford is licensed for 74 assisted
living beds, but only operates 69 beds within 69 units. This includes 16 memory care assisted living units (16 beds). The
management of the facility indicated that the facility typically operates at full capacity. The above displayed rates for the
facility are for the base level of care. The facility offers four additional levels of care for an extra monthly fee ranging from
$300 to $1,200 per month. This facility is located in the southwestern section of Davidson County/Nashville and will only
indirectly compete with the subject for residents.
IL-Inde pende nt, AL- As s is te d Living, M C - M e m o ry C a re As s is te d Living, S N - S kille d Nurs ing, S N ALZ - Nurs ing Alzhe im e r's , N/A -No t Applic a ble
Page 57
Barton House
Competitor 3
General
6961 U.S. Highway 70
South Nashville, TN 37221
Elizabeth Garton Masic - Executive
Contact Person:
Director
Telephone Number:
(615) 673-6922
13.1 miles southeast
Distance to Subject:
Owner:
Bellevue Seniors LLC
Operator:
GoodWorks
Street Address:
City, State, Zip:
Operations
Number of Licensed
Beds
Number of Operating
Beds
Stories
Constructed
Quality
Condition
Building
1
Design
Circa 2000 Visibility
Average Access
Average Neighborhood
Residential
Fair
Good
Suburban
IL
N/A
N/A
SN
AL
24
20
MC
CC/IN
Four Daily Meals
Utilities
Weekly Housekeeping
Maintenance
Laundry - Linens
Furnished Room
Activities
Social Services
Medication Mgmnt.
Secured Alzheimer's
Therapies
Beauty/Barber Shop
Hospice
Other
Respite
All Inclusive
Unit Type:
Size (SF)
Monthly Base Rate
Shared
Studio
1 Bedroom
2 Bedroom
Memory Care Shared
$4,900
Other
* As o f the effe ctive date o f va lue , 09/07/2011
Entrance Fee:
2nd Occupant
Payor Mix:*
Private
Medicaid
SSI/Other
Total
Other Fees
N/A
Community Fee
N/A
100%
0%
0%
100%
$2,500
AL
19
Occupancy
95.0%
IL
N/A
Occupancy
N/A
*As o f the effe ctive da te o f the re po rt
Comments:
Barton House operates a 20-bed (within 20 units) freestanding memory care assisted living community. The facility offers
private rooms with shared bathrooms at an all-inclusive rate. The management of the community indicated that it is typically
100.0% occupied. This facility is located in the southwestern section of Davidson County/Nashville and will only indirectly
compete with the subject for residents.
IL-Inde pe ndent, AL- As s is ted Living, MC - M e mo ry C are As s is ted Living, S N - S killed Nurs ing, S N ALZ - Nurs ing Alzhe ime r's , N/A -No t Applic able
Page 58
Competitor 4
General
34 White Bridge Road
Street Address:
Nashville, TN 37205
City, State, Zip:
Tim Rayborn, Marketing Director
Contact Person:
(615) 353-6181
Telephone Number:
12.5 miles southeast
Diocese of Nashville
Owner:
Operator:
Diocese of Nashville
Operations
Number of Licensed
Beds
Number of Operating
Beds
Stories
Constructed
Quality
Condition
3
2001
Good
Good
Building
Design
Visibility
Access
Neighborhood
Residential
Average
Good
Suburban
IL
N/A
N/A
SN
MC
AL
130
100
CC/IN
Three Daily Meals
Utilities
Weekly Housekeeping
Maintenance
Laundry - Linens
Furnished Room
Activities
Social Services
Medication Mgmnt.
Secured Alzheimer's
Therapies
Beauty/Barber Shop
Hospice
Other
Respite
Unit Type:
Size (SF)
Monthly Base Rate
Shared
Studio
330
$3,110
1 Bedroom
465 to 530
$3,950 to $4,100
2 Bedroom
570
$4,675
$2,600
Memory Care Private
182 to 234
$4,590 to $4,770
Other
Entrance Fee
2nd Occupant
Payor Mix:*
Private
Medicaid
SSI/Other
Total
All Inclusive
Other Fees
N/A
Community Fee
$500
60%
0%
40%
100%
$1,000
AL
93
Occupancy
93%
IL
N/A
Occupancy
N/A
Comments:
Mary Queen of Angels is an assisted living and memory care assisted living facility that is located on a larger campus owned by
the Diocese of Nashville. This campus also includes a skilled nursing facility and independent living units/villas. Mary Queen of
Angels is licensed for 130 beds, but only operates 100 beds within 98 units. This reflects that while the facility is configured to
offer some semiprivate accommodations, the community typically only offers private rooms. Total operating units includes 16
memory care assisted living units (20 beds). According to the management of Mary Queen of Angels, the facility's Catholic
affiliation enables the community to draw residents from a larger geographic area than what is typical for an assisted living
community. The management also indicated that the facility's average occupancy in recent years has been approximately 98.5%.
The above displayed rates for the facility are for the base level of care. The facility offers three additional levels of assisted living
care for an extra monthly cost of $300 per level. However, the facility also adjusts its rates downward based on a sliding-scale rate
structure, with each resident paying an amount appropriate to their income level. The above displayed rates represent the
maximum rates for residents. According to the management of the facility, approximately 40.0% of the facility's residents pay
below-market fees. Based on the above findings, combined with the location of the facility near the central portion of Nashville,
this facility will not significantly compete with the subject for residents.
Page 59
Competitor 5
Street Address:
City, State, Zip:
Contact Person:
Telephone Number:
Owner:
Operator:
General
11 Burton Hills Boulevard
Nashville, TN 37215
Sarah Bishop, Director of Sales and
Marketing
(615) 665-2742
15.6 miles southwest
Blakeford at Green Hills Corp
Blakeford at Green Hills Corp
Operations
Number of Licensed
Beds
Number of Operating
Beds
Stories
Constructed
Quality
Condition
2
1996
Good
Good
Building
Design
Visibility
Access
Neighborhood
Residential
Good
Average
Suburban
Unit Type:
Size (SF)
Monthly Base Rate
Shared
N/A
N/A
Studio
N/A
N/A
1 Bedroom
N/A
See Comments
2 Bedroom
N/A
See Comments
Alzheimer's Shared
N/A
N/A
Alzheimer's Private
N/A
N/A
Other
N/A
N/A
Unit Type:
Size (SF)
Monthly Base Rate
Shared
N/A
N/A
Studio
N/A
$3,750
1 Bedroom
N/A
$4,095
2 Bedroom
N/A
$7,550
Memory Care Shared
N/A
N/A
N/A
Other
N/A
N/A
IL
N/A
N/A
SN
MC
AL
78
65
CC/IN
Three Daily Meals
Utilities
Weekly Housekeeping
Maintenance
Laundry - Linens
Furnished Room
Activities
Social Services
Medication Mgmnt.
Secured Alzheimer's
Therapies
Beauty/Barber Shop
Hospice
Other
Respite
Service Level Compared to Subject
Entrance Fee
2nd Occupant
Other Fees
N/A
Community Fee
$2,785
Payor Mix:*
Private
100%
Medicaid
0%
SSI/Other
0%
Total
100%
Tiered
Similar
$2,500
AL
60
Occupancy
92%
IL
N/A
Occupancy
N/A
Comments:
Burton Court at Blakeford is an assisted living facility that is part of a larger continuing care retirement community
(Blakeford at Green Hills). It consists of independent living units and an 80-bed skilled nursing facility. Entrance fees for
independent living units range from $172,140 to $386,460, with monthly rents ranging from $2,063 to $4,775. The facility
utilizes a level of care/tiered rate structure. However, the management of the subject did not provide specific details on the
cost of the additional levels of care. This facility is located in the southern section of Davidson County and will not direct
compete with the subject for residents.
IL-Indepe nde nt, AL- As s is te d Living, M C - M e m o ry C a re As s is ted Living, S N - S kille d Nurs ing, S N ALZ - Nurs ing Alzhe im e r's , N/A -No t Applica ble
Page 60
Competitor 6
Street Address:
City, State, Zip:
Contact Person:
Telephone Number:
Owner:
Operator:
General
Nashville, TN 37215
Marketing
(615) 463-9111
HCRI Tennessee Properties, LLC
Brookdale Senior Living
Operations
Number of Licensed
Beds
Number of Operating
Beds
Stories
Constructed
Quality
Condition
4
2007
Good
Good
Building
Design
Visibility
Access
Neighborhood
Residential
Good
Average
Suburban
IL
N/A
N/A
SN
MC
AL
149
110
CC/IN
Three Daily Meals
Utilities
Weekly Housekeeping
Maintenance
Laundry - Linens
Furnished Room
Activities
Social Services
Medication Mgmnt.
Secured Alzheimer's
Therapies
Beauty/Barber Shop
Hospice
Other
Respite
Monthly Base Rate
Unit Type:
Size (SF)
N/A
Shared
N/A
$4,500
Studio
N/A
$5,000
1 Bedroom
N/A
$7,500
2 Bedroom
N/A
N/A
$6,390
N/A
Other
N/A
Entrance Fee
2nd Occupant
Other Fees
N/A
Community Fee
$675
Payor Mix:*
100%
Private
0%
Medicaid
0%
SSI/Other
100%
Total
Tiered
Similar
$3,500
110
AL
Occupancy
100.0%
N/A
IL
N/A
Occupancy
Comments:
Cumberland at Green Hills is licensed for 160 assisted living beds, but only operates 115 beds within 115 units. This reflects
that while the facility is configured to be able to offer some semiprivate accommodations, the community typically only
offers private rooms. Total operating units include 17 memory care assisted living units (17 beds). The facility is the newest
of the comparable facilities and is the most similar to the proposed subject. The management of the facility indicated that the
community achieved stabilized occupancy levels (100.0%) within three years of opening. This equates to an absorption rate
of approximately three residents per month. The above displayed rates are for the base level of assisted living care. The
community offers four levels of additional assisted living care for an extra monthly cost ranging from $470 to $1,720. This
facility is located in the southern section of Davidson County/Nashville and will not direct compete with the subject for
residents.
IL-Inde pe ndent, AL- As s is te d Living, M C - M e m o ry C a re As s is te d Living, S N - S kille d Nurs ing, S N ALZ - Nurs ing Alzhe im e r's , N/A -No t Applica ble
Page 61
Belmont Village
Competitor 7
Street Address:
City, State, Zip:
Contact Person:
Telephone Number:
Owner:
Operator:
General
4206 Stammer Place
Nashville, TN 37215
Lauren, Marketing
(615) 279-9100
Belmont Village Green Hills LLC
Belmont Village
Operations
Number of Licensed
Beds
Number of Operating
Beds
Stories
Constructed
Quality
Condition
3
1999
Good
Good
Building
Design
Visibility
Access
Neighborhood
Residential
Average
Average
Suburban
IL
N/A
N/A
SN
AL
160
115
MC
CC/IN
Three Daily Meals
Utilities
Weekly Housekeeping
Maintenance
Laundry - Linens
Furnished Room
Activities
Social Services
Medication Mgmnt.
Secured Alzheimer's
Therapies
Beauty/Barber Shop
Hospice
Other
Respite
Unit Type:
Size (SF)
Monthly Base Rate
Shared
N/A
N/A
Studio
500 to 700
$3,175 to $5,175
1 Bedroom
700 to 900
$6,175
2 Bedroom
N/A
N/A
N/A
N/A
Other
N/A
N/A
Entrance Fee:
2nd Occupant
Payor Mix:*
Private
Medicaid
SSI/Other
Total
Other Fees
N/A
Community Fee
N/A
100%
0%
0%
100%
Tiered
Similar
N/A
AL
112
Occupancy
97%
IL
N/A
Occupancy
N/A
Comments:
Belmont Village is licensed for 160 assisted living beds, but only operates 115 beds within 115 units. This reflects that while
the facility is configured to be able to offer some semiprivate accommodations, the community typically only offers private
rooms. Total operating units include 24 memory care assisted living units (24 beds). The assisted living portion of the facility
is currently 96.7% (88 residents) occupied and the memory care assisted living facility is currently 100.0% occupied (24
residents). This facility is located in the southern section of Davidson County/Nashville and will not be competitive with the
subject.
Page 62
ADDITIONS TO SUPPLY
To determine if there are any planned or proposed senior living facilities within the PMA,
conversations were conducted with county and city officials as well as the management of local senior
housing facilities. Neither the Tennessee Department of Health website’s new facility listing nor the
Tennessee Certificate of Need Projects list (2000 to current) listed any applications for new assisted
living beds in the PMA. Based on this research, there are no planned or proposed assisted living or
memory care assisted living facilities within the PMA.
LOCATION OF PROPOSED SUBJECT FACILITY
The subject is located in Ashland City, in the east central portion of Cheatham County. The subject’s
PMA is predominantly located within Cheatham County.
There are currently zero comparable
assisted living or memory care assisted living beds within the subject’s PMA. Given this factor, eight
additional facilities were profiled for comparison purposes. All of these facilities are located within the
Davidson County/Nashville area and range from 12.1 to 15.6 miles from the subject. All of the
comparable facilities are located in either southwestern or southern Nashville, in suburban, more
densely developed neighborhoods, than the subject’s area.
Unit Mix/Age Comparison
Based on research in the market, studio and one-bedroom units appear to be the predominant assisted
living unit type in the PMA. However, five of the eight comparable facilities that offer non-memory
care assisted living services also contain two-bedroom units. The subject’s non-memory care assisted
living unit mix will include 56.7% (34 units) studio units, 33.3% (20 units) one-bedroom units and
10.0% (six units) two-bedroom units, which is consistent with the market.
The majority of memory care assisted living providers predominantly offer private units. Given that
the subject will only offer private units (20 units), the subject’s unit mix is consistent with the market
findings.
Page 63
Upon completion, the subject property will be the only significant assisted living and memory care
assisted living facility in the PMA and Cheatham County. In addition, the subject property will be the
newest and most modern facility in the greater Nashville area. Given this factor, the subject will have
no competition for residents within its PMA and should be well positioned to compete with any
Nashville area facilities that will attempt to attract residents from Cheatham County.
Occupancy
The table below presents overall occupancy rates of the comparable assisted living facilities:
Overall Occupancy S tatistics
1
2
3
4
5
6
7
8
Provider
Barton House
M ary Queen of Angels
Belmont Village
M orningside of Belmont
Occupied
Beds
93
69
19
93
60
110
112
80
636
Licensed
Beds
Occup.
184
50.5%
74
93.2%
24
79.2%
130
71.5%
78
76.9%
149
73.8%
160
70.0%
130
61.5%
929
68.5%
Operating
Beds
Occup.
99
93.9%
69
100.0%
20
95.0%
100
93.0%
65
92.3%
110
100.0%
115
97.4%
82
97.6%
660
96.4%
Memory
Care Beds
38
16
20
20
0
17
24
0
Private
Pay %
100.0%
100.0%
100.0%
60.0%
100.0%
100.0%
100.0%
100.0%
135
94.2%
This table reflects all assisted living levels of care. Based on operating beds, the weighted average
occupancy for the comparable facilities is 96.4%. The variance between licensed and operating beds
reflects that some of the facilities are licensed to provide semiprivate accommodations. However, the
majority of these facilities predominantly offer private room accommodations. In addition, with the
exception of Mary Queen of Angels, all of the comparable facilities typically only accept private pay
residents. The above data reflects that the greater Nashville area is a strong market for assisted living
services. The accompanying tables provide a breakout of occupancy characteristics for both nonmemory care and memory care assisted living beds.
Page 64
Non-Memory Care Assisted Living Occupancy
Based on operating beds, the occupancy rates of the comparable non-memory care assisted living
facilities range from 92.3% to 100.0%, with a weighted average of 96.6%. This is an indication of
stable demand for non-memory care assisted living services in the greater Nashville area.
1
2
4
5
6
7
8
Provider
Belmont Village
Assisted Living Beds
Occupied
Operating
Beds
Beds
Occup.
57
61
93.4%
53
53
100.0%
76
80
95.0%
60
65
92.3%
93
93
100.0%
88
91
96.7%
80
82
97.6%
507
525
96.6%
Memory Care Assisted Living Occupancy
Based on operating beds, the occupancy rates of the comparable memory care assisted living facilities
range from 85.0% to 100.0%, with a weighted average of 95.6%. This is an indication of stable
demand for memory care assisted living services in the greater Nashville area.
1
2
3
4
6
7
Provider
Barton House
Belmont Village
Weighted Average
Memory Care AL Occupancy S tatistics
Occupied
Operating
Beds
Beds
Occup.
36
38
94.7%
16
16
100.0%
19
20
95.0%
17
20
85.0%
17
24
129
17
24
135
100.0%
100.0%
95.6%
Assisted Living and Memory Care Rates
In order to determine the reasonableness of the subject’s proposed private pay rates, a survey of local
facilities was conducted. The following table presents a summary of these rates:
Page 65
1
2
3
4
5
6
7
8
Provider
Barton House
Belmont Village
M in to M ax
M ean
M edian
S ubject
$2,950
$2,745
$3,110
$3,750
$4,500
$3,175
$2,500
Studio
to
$4,130
to
$2,500
to
$2,981
to
$5,175
$5,175
$3,559
$3,175
$3,194
1 Bedroom
2 Bedroom
$4,775 to $4,995
$3,800 to $3,900 $4,000
$3,950
$4,095
$5,000
$6,175
$2,860
$2,860
$3,498
to
to
$4,100 $4,675
$7,550
$7,500
Memory Care Private
$5,190
$3,845 to $4,600
$4,900
$4,590 to $4,770
$6,390
$3,100 $3,950
to $6,175 $3,950 to $7,550
$4,250
$5,535
$4,095
$4,675
$3,741
$3,845
$5,019
to $6,390
$4,898
$4,770
to $5,323
The above displayed rates are the comparable facilities’ rates for the base level of care. The majority
of the comparable non-memory care assisted living facilities utilize tiered or a-la-carte rate structures.
Typically, more sophisticated assisted living operators utilize tiered or level-of-care rate structures,
allowing these facilities to maximize potential revenue. In a tiered rate system, facilities establish a
rate for a base level of care and charge additional fees per level of care required.
The subject will offer studio units for a base monthly rate ranging from $2,981 to $3,194. Studio rates
among the comparable facilities range from $2,500 to $5,175, with a mean of $3,559. The subject’s
rates are oriented at the lower end of the range of the comparable facilities’ rates. However, given that
the subject will be located in a less affluent community than the majority of the comparable facilities,
the subject’s studio rates are priced correctly. The subject will offer one-bedroom units for a monthly
rate of $3,498, which are also oriented at the lower end of the range ($2,860 to $6,175) of comparable
facility rates and are consistent with the conclusion for the subject’s studio rate.
The subject’s two-bedroom rate monthly base rate ($3,741) is below the range ($3,950 to $7,550) of
comparable facilities. This rate is reasonable given the lower cost of living in Cheatham County than
in Davidson County/Nashville. The subject’s private memory care assisted living rates ($5,019 to
$5,323) are within the range of the comparable rates and are reasonable.
Page 66
Overall, the subject’s proposed rates are reasonable. Based on the above rates, a weighted average
monthly non-memory care rate of $3,293 and a weighted average monthly memory care assisted living
of $5,171 will be utilized in the demand calculations completed later in this report.
PMA DEMOGRAPHIC ANALYSIS
PMA population statistics are provided by Claritas, Inc., a national demographic supplier, and are
summarized in the following table:
Total Population
Total Households
Median Housing Value
Demographic Analysis
Primary Market Area
%
2011
2016
Change
31,420
32,910
4.7%
11,571
12,154
5.0%
$147,836 $167,130
13.1%
% of 75+ Householder Living in Non Married Families
% of 65+ Householders Homeowners
61.2%
91.7%
65+ Householders
As a % of Total Households
2,238
19.3%
2,779
22.9%
24.2%
65-74 Population
As a % of Total Population
2,200
7.0%
2,904
8.8%
32.0%
75-84 Population
1,169
3.7%
1,340
4.1%
14.6%
85+ Population
446
1.4%
540
1.6%
21.1%
% Non-institutional Age 65+ With:
Sensory Disability
Physical Disability
Mental Disability
Self-Care Disability
Go-Outside-Home Disability
Source: Claritas, Inc.
14.4%
34.7%
17.6%
11.9%
21.5%
Page 67
The 2011 estimated population within the PMA for the aged 65 to 74 cohort represents 7.0% of the
total population and is projected to increase to 8.8% by 2016. The aged 75 to 84 cohort is estimated to
increase moderately as a percentage of total population from 3.7% to 4.1%. As a percentage of total
population, the aged 85-plus cohort is estimated to moderately increase from 1.4% to 1.6% by 2016.
The general PMA population is expected to increase 4.7% by 2016. The aged 65 to 74 cohort is
expected to increase by 32.0%, the aged 75 to 84 cohort is forecasted to increase by 14.6% and the
aged 85-plus cohort is projected to increase by 21.1% by 2016. The population aged 85-plus is
expected to exhibit a higher growth rate when compared to that of the general PMA population. The
population aged 85-plus is the most likely to need senior living services. This is a positive influence
for the future growth demand for senior housing facilities.
The following table presents the projections for adults age 45 to 64:
Adult Children Population
Age Cohort
2000
2011
% Change
2016
% Change
45 - 54 Population
4,008
5,235
30.6%
5,121
-2.2%
55 - 64 Population
2,449
4,026
64.4%
4,697
16.7%
Total 45 - 64 Population
6,457
9,261
43.4%
9,818
6.0%
Total Population
27,582
31,420
13.9%
32,910
4.7%
Between 2000 and 2011, the adult children population increased 43.4%. The total population within
the PMA increased (13.9%) during the same period. Over the next five years, the adult children
population is expected to continue to increase (6.0%) compared to a projected moderate decrease
(2.2%) in the total population. The primary group (ages 55 to 64) likely to have parents in need of
senior living services increased by 64.4% since 2000 and is expected to increase an additional 16.7%
over the next five years. The previous growth of adult children is positive, given that seniors often
relocate near their adult children when seeking senior living services. This would suggest the PMA
will experience in-migration of seniors to the area as the parents of these adult children age and require
residential healthcare services.
Page 68
NON-MEMORY CARE ASSISTED LIVING DEMAND
SENIOR CARE TRENDS
The U.S. General Accounting Office reported that approximately seven million persons in 1993
required some form of assistance with activities of daily living (ADLs) and this number is expected to
double by the year 2020.
Independent and assisted living facilities have become an attractive
alternative for nursing home operators, as budget cutbacks and tighter regulations have decreased the
number of available nursing home beds. This leaves a large segment of the population that requires
some form of daily assistance looking to family members, home health care agencies, independent
living or assisted living facilities to meet their assistance needs. Demand for assisted living facilities
is also strong because these facilities offer a lower cost alternative to nursing homes.
Traditionally, seniors have had limited options for housing other than their own homes. Options
include moving in with family members who then become burdened with providing care or,
alternatively, moving into nursing homes to possibly become bed bound. However, the skilled care
provided by nursing homes may not be necessary for many older persons. A 1992 Massachusetts
study of nursing home residents found that only 37% required the level of care they were receiving.
Some wealthier elderly people might employ a caretaker to live with them, but for many elderly
people, these options are not feasible or are undesirable. Older persons need housing that augments
independence while providing access to supportive services.
AGE AND HEALTH QUALIFIER
The population of health eligible seniors is of critical importance in determining the number of seniors
who require assistance with ADLs and are qualified for assisted living units. The decision to move to
an assisted living facility is typically driven by need rather than a lifestyle choice. Therefore, the
population must be identified to reflect that segment with care or mobility needs. According to the
National Housing Survey of Adults Age 60+, the following chart shows the findings about how
abilities change among the population as a function of age.
Page 69
60+ Population R e quiring Assistance with Activitie s of D aily
Living
18.0
Percent by Category
16.0
14.0
12.0
Bathing
10.0
Walking
8.0
Dressing
Transferring
6.0
Eating
4.0
2.0
0.0
60-64
65-69
70-74
75-79
80-84
85+
The National Information Aging Center published statistics on Mobility and Self-Care Limitations of
Persons 60-plus by Age: 1990 (United States, Civilian Non-institutionalized Persons), based on 1990
census information.
The study identifies percentages of the population needing assistance with
activities of daily living. Based on the study, 13.3% of cohorts aged 65 to 74, 25.8% of cohorts aged
75 to 84 and 49.8% of cohorts aged 85 and older have mobility or self-care limitations requiring
assistance.
According to the National Survey of Assisted Living Residents: Who is the Customer?, the mean age of
assisted living residents is 84.2 years.
Based upon the information presented, the age and health qualified population is based upon 25.8% of
the 75 to 84 population and 49.8% of the 85-plus population. Applying the study's percentages to the
estimated 2011 and 2016 households result in a total number of age and health qualified persons with
mobility and self-care limitations. The minimum age that is considered for assisted living demand in
this study is 75 years old. The following table calculates the health qualified population within the
PMA:
Page 70
Age and Health Qualified Population Calculation
Year
2011
65+ Population
2016
3,815
4,784
Health Qualifier:
1
65-74 :
2,200 x
13.3% =
0
2,904 x
13.3% =
0
75-84:
1,169 x
25.8% =
302
1,340 x
25.8% =
346
446 x
49.8% =
222
540 x
49.8% =
269
85+:
Health Qualified
524
615
Only population 75 and older are considered.
INCOME QUALIFIER
The subject’s weighted average private pay assisted living rate is estimated to be $3,293 per month.
This indicates a minimum annual household income of $39,519 ($3,293 x 12 months) to cover
housing costs for an assisted living facility. Since monthly rent covers a minimal amount of living
expenses (utilities and maintenance), the maximum a resident can spend on housing, meals and
services is estimated at 85% of their annual income, which is the generally accepted proportion within
the industry. Therefore, the required annual income is estimated at $46,493 ($39,519 divided by 85%
for assisted living).
This analysis assumes that homeowners can sell their homes and have assets to invest for income and
from which to draw funds. Based on conversations with professionals in the area, assisted living
residents typically spend down their assets from a sale of a home or other investments as part of
paying for the services at an assisted living facility. Based on an analysis of local real estate data,
homes are selling in a respectable time frame in Ashland City. According to information provided by
Movoto.com, there are currently 133 residential home sales in September 2011 in the Ashland City
area. This estimate is 17.0% less than the comparable estimate for September 2010. This reflects that
274 residential homes have sold or are under contract of sale in 2011. In addition, homes are typically
on the market for only 94 days. These findings are an indication that homes are selling in the Ashland
City area.
According to the 2009 Overview of Assisted Living, the average length of stay for a resident in an
assisted living facility is approximately 26.9 months. However, this does not reflect that residents of
Page 71
assisted living facilities may be required to relocate to a higher level of senior housing care (skilled
nursing) after staying in an assisted living community. In addition, given federal Medicaid eligibility
standards, skilled nursing services will require payment through private payment sources until the
seniors “spend down” all of their assets. Given these factors, it is assumed that the homeowners will
spend down the proceeds from the sale and earn an average rate on the balance of 2% over a five-year
period. Therefore, these individuals require a net minimum income of $22,064, or the required gross
annual income less the annual annuity of the net proceeds from the home sale at 2%. The income
attributable to the sale of a home is summarized in the following calculation:
Additional Income from Home Sale
Minimum Required Income (renter)
$46,493
Median Home Value @ 90% equity
$133,052
Less Closing Costs at 10.0%
13,305
Net Proceeds
$119,747
Annual Annuity at 2% for five years
$24,428
Minimum Required Income (homeowner)
$22,064
Based upon the percentage of the population aged 65-plus owning a home (91.7%), the assumption is
that the population aged 75-plus owning a home is 91.7%, and the remaining 8.3% are renters.
Applying the income required, the weighted average minimum income required for both homeowners
and renters is as follows:
Homeowners:
91.7%
x
$22,064
=
$20,225
Renters:
8.3%
x
$46,493
=
$3,877
Weighted Average:
$24,101
Approximately 49.5% of the PMA's over 75 households are earning $24,101 or above and, therefore,
income qualify for assisted living. This qualified percentage (49.5%) is derived by taking the number
of aged 75-plus households that earn more than $24,101 and dividing it by the total number of aged
75-plus households. In determining the income qualified population throughout this study, income
gains will be offset by rate increases. Therefore, 49.5% of the population throughout this study is
projected to be income qualified. The following table calculates the income qualified population
within the PMA:
Page 72
Age, Health and Income Qualified Population Calculation
Year
2011
65+ Population
2016
3,815
4,784
Health Qualifier:
65-74 1 :
2,200 x
13.3% =
0
2,904 x
13.3% =
0
75-84:
1,169 x
25.8% =
302
1,340 x
25.8% =
346
446 x
49.8% =
222
540 x
49.8% =
269
85+:
Health Qualified
Percent with income Above $24,101
Health and Income Qualified
524
615
49.5%
49.5%
259
304
LIVING STATUS QUALIFIER
According to the 2009 ALFAA study, approximately 12% of all assisted living residents were married
and living with their spouses. The marital status of independent living residents is typically similar to
assisted living residents. Therefore, this demand calculation adjusts gross demand to account for only
those seniors in non-married households. Of the total 75-plus households in the PMA, 61.2% live in
non-married households.
PERIPHERAL DEMAND ADJUSTMENT
A portion of the subject’s residents derived from outside of the PMA are anticipated to originate from
the subject’s SMA. However, peripheral demand is driven by seniors relocating to the area to be near
their adult children. For the purpose of this analysis, it is assumed that the subject’s PMA will
represent an area of origin of only 90% of the subject’s residents. This also assumes that 10% of the
subject’s residents will be derived from outside of the PMA.
The subject’s PMA only displayed adult children population growth (43.4%) from 2000 to 2011.
However, the PMA is only expected to experience a 6.0% increase in adult children from 2011 to
2106. Since seniors often relocate to be near adult children when seeking senior housing services, the
PMA’s previous adult children growth, would indicate that the subject’s PMA will experience some
in-migration of seniors. Therefore, a peripheral demand adjustment of 90.0% is used in this analysis.
After gross demand has been adjusted for living status, it is then divided by 90.0%.
Page 73
SATURATION LEVEL
Data taken from the National Center for Health Statistics indicates approximately 10% to 13% of the
national population over age 65 receives home healthcare. This indicates that 10% to 13% of the total
potential demand will likely receive home healthcare rather than move to an assisted living facility
upon desiring access to care on a fee-for-service basis.
In addition, as indicated, a significant
percentage of the population will live with relatives or attempt to ignore their needs. In general, a
given market can support a senior facility, which totals 0% to 50% of the refined population of
income, age and health qualified households. Therefore, the saturation level is estimated at 50% of the
qualified demand. Applying the saturation level to the qualified demand results in the gross demand
for assisted living services in the PMA.
COMPETITIVE SUPPLY
There are no existing or proposed comparable non-memory care assisted living beds in the PMA.
Therefore, the competitive supply estimate for the PMA in 2011 and 2016 is zero. The following table
summarizes the age, income, living status and health qualified demand from the PMA:
Year
2011
65+ Population
2016
3,815
4,784
Health Qualifier:
65-74 1 :
2,200 x
13.3% =
0
2,904 x
13.3% =
0
75-84:
1,169 x
25.8% =
302
1,340 x
25.8% =
346
446 x
49.8% =
222
540 x
49.8% =
269
85+:
Health Qualified
Non Married Households
Single, Health and Income Qualified Persons
Peripheral Demand
Adjusted Single, Health and Income Qualified Persons
Saturation Rate
Adjusted Gross Demand
Less Competitive Supply at 93%
Net Demand
524
615
49.5%
49.5%
259
304
61.2%
61.2%
159
186
90%
90%
176
207
50.0%
50.0%
88
104
0
0
88
104
Page 74
There is currently unmet demand for 88 non-memory care assisted living beds in 2011, which
increases to 104 beds in 2016. This reflects the projected growth of the aged 75 and older population
(16.4%) in the PMA. The net demand estimates for 2011 (88 beds) and 2016 (104 beds) are greater
than the subject’s proposed number of non-memory care assisted living beds (60 beds). This reflects
that there are currently no existing non-memory care assisted living communities within the subject’s
PMA.
The above mentioned factors, combined with the current high occupancy levels of existing area nonmemory care assisted living facilities located outside of the PMA in Nashville, are an indication that
there is adequate support for the development of the subject’s proposed 60 assisted living beds.
MEMORY CARE DEMAND
The memory care calculation utilizes the same PMA population statistics that were provided in the
previous demand analysis in the demographic analysis table.
AGE AND HEALTH QUALIFIER – ALZHEIMER’S/DEMENTIA
A 2007 study completed by the Alzheimer’s Association established prevalence rate of Alzheimer’s
disease/dementia among seniors. Based on this study, 2.0% of the cohorts aged 65 to 74, 19.0% of
cohorts age 75 to 84 and 42.0% of cohorts age 85 and older have some form of Alzheimer’s disease
and/or dementia. Applying the study's percentages to the estimated 2011 and 2016 households, results
in a total number of age and health qualified persons with Alzheimer’s disease and/or dementia. The
minimum age that is considered for Alzheimer’s assisted living demand in this study is 75 years old.
The following table calculates the health qualified population within the PMA:
Page 75
Age and Health Qualified Population Calculation
Year
2011
65+ Population
2016
3,815
4,784
Health Qualifier:
1
65-74 :
2,200 x
13.3% =
0
2,904 x
13.3% =
0
75-84:
1,169 x
25.8% =
302
1,340 x
25.8% =
346
446 x
49.8% =
222
540 x
49.8% =
269
85+:
Health Qualified
524
615
INCOME QUALIFIER
As previously established, the subject’s weighted average private pay assisted living rate is estimated
to be $5,171 per month. This indicates a minimum annual household income of $62,052 ($5,171 x 12
months) to cover housing costs for an assisted living facility. Since the monthly rent will only cover a
minimal amount of living expenses (utilities and maintenance), the maximum a resident can spend on
housing, meals and services is estimated at 90% of their annual income, which is the generally
accepted proportion within the industry.
Therefore, the required annual income is estimated at
$68,947 ($62,052 divided by 90% for memory care assisted living).
Similar to the calculation of non-memory care assisted living demand, this analysis assumes that
homeowners can sell their homes and have assets to invest for income and from which to draw funds.
It is assumed that the homeowners will spend down the proceeds from the sale and earn an average
rate on the balance of 2% over a five-year period. Therefore, these individuals require a net minimum
income of $44,518, or the required gross annual income less the annual annuity of the net proceeds
from the home sale at 2%. The income attributable to the sale of a home is summarized in the
following calculation:
Additional Income from Home Sale
Minimum Required Income (renter)
Median Home Value @ 90% equity
Less Closing Costs at 10.0%
Net Proceeds
$68,947
$133,052
13,305
$119,747
Annual Annuity at 2% for five years
$24,428
Minimum Required Income (homeowner)
$44,518
Page 76
Based upon the percentage of the population aged 65-plus owning a home (91.7%), the assumption is
that the population aged 75-plus owning a home is 91.7%, and the remaining 8.3% are renters.
Applying the income required, the weighted average minimum income required for both homeowners
and renters is as follows:
Homeowners:
91.7%
x
$44,518
=
$40,806
Renters:
8.3%
x
$68,947
=
$5,749
Weighted Average:
$46,555
Approximately 19.9% of the PMA's over 75 households are earning $46,555 or above and, therefore,
income qualify for memory care assisted living. This qualified percentage (19.9%) is derived by
taking the number of aged 75-plus households that earn more than $46,555 and dividing it by the total
number of aged 75-plus households. In determining the income qualified population throughout this
study, income gains will be offset by rate increases. Therefore, 19.9% of the population throughout
this study is projected to be income qualified. The following table calculates the income qualified
population within the PMA:
Year
2011
65+ Population
2016
3,815
4,784
Health Qualifier:
65-74 1:
2,200 x
0.0% =
0
2,904 x
0.0% =
0
75-84:
1,169 x
19.0% =
222
1,340 x
19.0% =
255
446 x
42.0% =
187
540 x
42.0% =
227
85+:
Health Qualified
409
481
19.9%
19.9%
82
96
LIVING STATUS QUALIFIER
According to the 2010 ALFAA study, approximately 12% of all assisted living residents were married
and living with their spouses. The marital status of independent living residents is typically similar to
assisted living residents. Therefore, this demand calculation adjusts gross demand to account for only
Page 77
those seniors in non-married households. Of the total 75-year and older households in the PMA,
61.2% live in non-married households.
PERIPHERAL DEMAND ADJUSTMENT
For the purpose of this analysis, it is assumed that the subject’s PMA will represent an area of origin
of only 90% of the subject’s residents. This also assumes that 10% of the subject’s residents will be
derived from outside of the PMA. Therefore, after gross demand has been adjusted for living status, it
is then divided by 90%.
SATURATION LEVEL
Data taken from the National Center for Health Statistics indicates approximately 10% to 13% of the
national population over age 65 receives home healthcare. This indicates that 10% to 13% of the total
potential demand will likely receive home healthcare rather than move to an assisted living facility if
upon desire for access to care on a fee-for-service basis. In addition, conversations with developers
and operators indicate a significant percentage of the population will live with relatives or attempt to
ignore their needs. In general, a given market can support a senior facility, which totals 0% to 40% of
the refined population of income, age and health qualified households. Therefore, the saturation level
is estimated at 40% of the qualified demand. Applying the saturation level to the qualified demand
results in the gross demand for assisted living services in the PMA.
COMPETITIVE SUPPLY
There are no existing or proposed comparable memory care assisted living beds in the PMA.
Therefore, the competitive supply estimate for the PMA in 2011 and 2016 is zero. The following table
summarizes the age, income, living status and health qualified demand from the PMA:
Page 78
Year
2011
65+ Population
2016
3,815
4,784
Health Qualifier:
65-74 1:
2,200 x
0.0% =
0
2,904 x
0.0% =
0
75-84:
1,169 x
19.0% =
222
1,340 x
19.0% =
255
446 x
42.0% =
187
540 x
42.0% =
227
85+:
Health Qualified
Non Married Households
Single, Health and Income Qualified Persons
Peripheral Demand
Adjusted Single, Health and Income Qualified Persons
Saturation Rate
Adjusted Gross Demand
Less Competitive Supply at 93.0%
Net Demand
409
481
19.9%
19.9%
82
96
61.2%
61.2%
50
59
90%
90%
56
65
40.0%
40.0%
22
26
0
0
22
26
There is currently unmet demand for 22 memory care assisted living beds in 2011, which increases to
26 beds in 2016. This reflects the projected aged 75 and older population growth (16.4%) in the PMA.
The net demand estimates for 2011 (22 beds) and 2016 (26 beds) are slightly greater than the subject’s
proposed number of memory care assisted living beds (20 beds). This reflects that there are currently
no existing assisted living communities within the subject’s PMA.
The above mentioned factors, combined with the current high occupancy levels of existing area
memory care assisted living facilities located outside of the PMA in Nashville, are an indication that
there is adequate support for the development of the subject’s proposed 20 memory care assisted
living beds.
Page 79
HIGHEST AND BEST USE
“Highest and best use” may be defined as:
The reasonably probable and legal use of vacant land or an improved property, which
is physically possible, appropriately supported, financially feasible, and that results in
the highest value.7
For existing properties, two analyses of highest and best use are required. The first is the highest and
best use "as vacant," which assumes that the actual improvements do not exist. The outcome of the
highest and best use "as vacant" determines how the land value will be determined. The second
highest and best use analysis is "as improved," which considers the actual improvements.
The highest and best use of the land "as vacant" may be different from the highest and best use of the
improved property. This may be true when the improvement is not the maximally productive use, yet
still makes a contribution to the total property in excess of land value.
The highest and best use of both the land as though vacant and the property as improved must meet
four criteria. The highest and best use must be legally permissible, physically possible, financially
feasible and maximally productive.
Legally Permissible − uses that are allowed by private restrictions, zoning, building
codes, historic districts, environmental regulations and possible long-term leases.
Physically Possible − considers the size, shape, area, terrain and accessibility of a
parcel, and the risk of natural disasters such as floods or earthquakes.
Financially Feasible − which uses are likely to satisfy operating expenses, financial
obligation and capital amortization. All uses that are expected to produce a positive
return are regarded as financially feasible.
Maximally Productive − of the financially feasible uses, the use that produces the
highest residual land value consistent with the rate of return warranted by the market
for that use is the highest and best use.
7
The Appraisal of Real Estate, Thirteenth Edition, Appraisal Institute, Illinois, 2008, page 278.
Page 80
HIGHEST AND BEST USE AS THOUGH VACANT
Highest and best use as though vacant assumes that the subject site is vacant and available for
development.
LEGALLY PERMISSIBLE
Legal restrictions to a site are typically private deeded restrictions or public restrictions created by
zoning. Additional legal restrictions may include a lease or similar encumbrance such as an easement,
encroachment or an attachment to the site. We are unaware of any leases on the land, recorded
easements, deed restrictions or environmental restrictions that would limit development of the site.
According to the According to the Ashland City Department of Codes and Building Safety, the
proposed parcel is part of a Planned Unit Development (PUD). The PUD is specific to the
proposed subject as well as the existing adjacent multi-family apartment complex (VantagePointe
Homes at Marrowbone Heights). A copy of the PUD agreement is included in the addendum to
this report. According to Michael Armstrong, the city’s Building and Coding Official, there are no
specific zoning regulations or development restrictions for a PUD in Ashland City. In addition, within
a PUD, any proposed use is potentially a legal and confirming use. Therefore, the subject would be a
legal, conforming use.
It is unlikely that there would be any adverse reactions from local residents to develop the site given
the predetermined zoning.
PHYSICALLY POSSIBLE
The size, shape, available utilities, terrain, accessibility and risk of natural disasters all affect potential
development of the subject site. Only typical utility easements exist on the subject site, which do not
limit its potential development. The subject site is an irregularly shaped, interior lot that slopes
upward to the east. It contains approximately 191,882 square feet, or 4.405 acres.
The subject site provides good functional utility for potential developments. The site soils appear
adequate to support a variety of development types. All public utilities are available and of adequate
Page 81
capacity to support a variety of development. The subject could support any of the legally permitted
uses.
Based upon the legal constraints, as set forth by the Zoning District and the surrounding uses in the
subject's immediate area, in conjunction with the site's physical characteristics, the most probable use
is a senior living facility.
FINANCIALLY FEASIBLE
The next step in the analysis is to consider the financial feasibility of those uses which are legally
permitted and physically possible. Any use of the subject site that provides an acceptable financial
return to the land is financially feasible. The primary test is whether the particular use results in a
market value that is high enough to cover all development costs, or whether the income generated by
the property is sufficient to satisfy all operating expenses. Based upon the development of other sites
in the area, a senior living facility is financially feasible.
MAXIMALLY PRODUCTIVE
The use that produces the highest residual land value is the highest and best use. Therefore, the
maximally productive use of the subject, assuming it is vacant and available for development, is a
senior living facility.
HIGHEST AND BEST USE AS IMPROVED
This analysis considers the property with the existing improvements in place. The highest and best
use of the property as improved is analyzed for the following two reasons:
1. To identify the property use that can be expected to produce the highest overall return
for each dollar of capital invested.
2. To apply the principle of consistent use to the collection and selection of data. All the
comparable data used later in this report were partially selected due to their similar
highest and best use.
Page 82
The same four tests that are applied to arrive at the highest and best use as though vacant are also
applied to determine the highest and best use as improved.
LEGALLY PERMISSIBLE
The proposed improvements will be a legally conforming use according to current zoning regulations.
Considering the density and configuration of the proposed improvements, any addition to the property
is not warranted.
PHYSICALLY POSSIBLE
The proposed improvements will consist of a four-story, 81,252-square-foot senior living facility
which will adequately serve their intended function and, therefore, pass the physically possible test.
As indicated in the description of improvements, since the subject facility will be of new construction,
no deferred maintenance is implied.
FINANCIALLY FEASIBLE AND MAXIMALLY PRODUCTIVE
The three basic questions addressed in the financially feasible analysis are as follows:
1. Will the proposed improvements contribute to the land value?
2. Should the proposed improvements be modified?
3. Should the improvements be left alone?
The method used to determine if the proposed improvements will contribute to the overall property is
to compare the estimated total market value derived in this report to the value of the site, less the cost
of demolition. If the latter is higher, the proposed improvements should not be built. If the value of
the site less demolition is much lower than the overall value, the proposed improvements reflect a
financially feasible use.
Page 83
Based on the conclusions within this report, the value of the proposed subject property assuming
completion of construction and stabilization is higher than the value of the subject site. Therefore,
proposed improvements will add considerable value to the site and are a financially feasible use.
The financially feasible and maximally productive use of the subject is for its proposed use.
As of the date of value, the real estate is hypothetically assumed as being used as an assisted living
facility. This use is reflected in the appraisal.
VALUATION METHODOLOGY
An appraisal is an orderly process in which the data used to estimate the value of the subject property
is acquired, classified, analyzed and presented.
Appraisal methodology applied to any specific
property or property types must emulate the rationale of market participants. The first step is defining
the appraisal problem, i.e., the identification of the real estate, the effective date of value, the property
rights being appraised and the type of value sought. Once this has been accomplished, the appraiser
collects and analyzes the factors that affect the market value of the subject property.
There are three recognized approaches in the valuation of real property: the Cost, Sales Comparison
and Income Capitalization approaches. The type and age of the property and the quality and quantities
of available data affect the applicability of each approach in a specific appraisal situation.
The basic tenet of all three appraisal approaches is the principle of substitution. This principle is
defined as follows:
When several similar or commensurate commodities, goods, or services are available,
the one with the lowest price attracts the greatest demand and widest distribution.8
8
Ibid., page 38.
Page 84
This principle assumes rational, prudent market behavior, with no undue cost due to delay. According
to the principle of substitution, a buyer will not pay more for a property than another that is equally
desirable. It affirms that a prudent purchaser has three alternative courses of action available: to buy a
vacant site and build a similar property (Cost Approach), to acquire an equally desirable existing
property offering comparable utility (Sales Comparison Approach), or to acquire a substitute income
stream of comparable quality, quantity and durability (Income Capitalization Approach).
In the Cost Approach, the current cost of constructing the subject improvements is
estimated, less all forms of depreciation plus the market value of the underlying land.
The result is the indicated property value via the Cost Approach.
The Sales Comparison Approach involves a search for recent sales and current
listings of comparable properties and an analysis of the selected data as they relate to
the subject. The two indicators of value employed in this approach are the price per
bed and the effective gross income multiplier. In valuing skilled nursing buildings,
the most common unit of comparison is the price per bed. Comparable data is
adjusted to compensate for differences. An analysis of the comparable data is then
made to arrive at a current estimate of the market value of the subject. The second
method is based on selecting an effective gross rent multiplier, which is derived from
the market data, and multiplying it by the subject's estimated effective gross income.
Based upon these two techniques, an estimate of value via the Sales Comparison
Approach is determined.
The Income Capitalization Approach involves an estimate of a property's capacity
to produce income. This method involves estimating market rent for the subject
property, typical vacancy and credit loss rates and expenses. From this, an estimate of
the net operating income can be generated. There are two primary methods to value
the income stream of a property. One is the Direct Capitalization Method, which
capitalizes the net operating income by a single rate derived from the market. The
second method is a Discounted Cash Flow Analysis, which projects the income and
expense streams for a specified holding period. The ultimate reversion from the sale
of the property at the end of the holding period is also considered. Based upon HUD
guidelines, the Discounted Cash Flow Analysis is not a permitted method and
therefore will not be utilized.
The final step in the valuation process is the reconciliation of the three value indications into a single
conclusion of value for the subject. The reliability and precision of each approach are considered,
along with possible inconsistencies with the other approaches. Thus, certain approaches may be
emphasized because of more reliable data and analyses, or because of a greater degree of relevance to
the behavior of the marketplace.
Page 85
The subject will be valued utilizing all three approaches to value. The Cost Approach will be
presented first, followed by the Sales Comparison Approach and the Income Capitalization Approach.
The valuation will conclude with a reconciliation of the three approaches and a final estimate of value.
Value estimates determined by the Cost, Sales Comparison and Income Capitalization approaches are
rounded to the nearest $10,000.
COST APPROACH
The Cost Approach is divided into three segments: the land value estimate, the estimated cost new of
the improvements and the depreciation estimate. The Cost Approach is also known as the summation
approach because at the end of the approach, the three segments are brought together to derive an
indication of value. Each one of these three processes is further described later in this section.
LAND VALUATION
Anticipation, change, supply and demand, substitution and balance are appraisal principles that
influence land value. The subject is valued in accordance with its highest and best use and assumed to
be vacant. The procedures used to value vacant land are as follows.
Sales Comparison: sales of similar parcels of land are analyzed, compared and
adjusted to provide a value indication for the land being appraised.
Allocation: allocates total value, including improvements, to land and building. The
principles of balance and the related concept of contribution affirm that there is a
typical ratio of land value to property value for specific categories of real estate in
specific locations. This method is typically used when adequate land sales do not
exist.
Extraction: land value is extracted from the sale price of an improved property by
deducting the value contribution of the improvements, estimated at their depreciated
costs.
Income Capitalization: converts, via a capitalization or discount rate, a cash flow
attributable to the land into value.
Page 86
The Sales Comparison procedure is the most common technique for valuing land and it is the preferred
method when comparable sales are available. Based upon the quantity and quality of the available
data herein, the Sales Comparison procedure is used to estimate land value.
SURVEY OF COMPARABLE LAND DATA
In order to estimate the value of the subject site, an extensive survey is conducted for comparable
sales, sales negotiations and offerings of vacant or minimally improved sites within the surrounding
area. Land in the subject area is purchased, sold and valued on a price-per-square-foot basis. The unit
of comparison used in this analysis is the price per square foot. The research of vacant land sales
included conversations with local appraisers, real estate professionals and municipal employees that
are based in the Ashland City/Cheatham County areas. However, none of these professionals were
able to provide any adequate land sales with these areas. Given this factor, land sales within similar
Nashville/Davidson County areas were utilized in this analysis. The data most pertinent in formulating
an opinion of value are presented in the following table. A sheet summarizing the sales along with a
map is located in the addendum.
American House of Bonita Springs
S ummary of Comparable Land Data
Sale
Location
Date
Zoning
Size SF
Size Acres
Price
Price/SF
Price/Acre
1
5110 Ashland City
Highway
2
7960 Coley Davis Road
3
2810 Tucker Road
Nashville
Nashville
Nashville
4/28/2011
CL
7/7/2009
SP
10/30/2008
R10
127,631
251,777
104,980
2.93
5.78
2.41
$245,500
$1,000,000
$125,000
$1.92
$3.97
$1.19
$83,788
$173,010
$51,867
The above comparable sales indicate an unadjusted price range of $1.19 to $3.97 per square foot.
Adjustments were made for factors such as property rights conveyed, financing terms, conditions of
Page 87
sale, market conditions (time), location, access and visibility, and physical characteristics, such as
topography, shape, size and zoning.
EXPLANATION OF ADJUSTMENTS
Property Rights
All of the comparable sales reflect fee simple estates. No adjustments are warranted for this factor.
Financing
The verification process indicates that the prices of the transactions used in this analysis are considered
to be cash-equivalent prices. No adjustments are warranted for this factor.
Conditions of Sale
This adjustment takes into account any unusual conditions or circumstances that may affect the sales
or listing price. Utilities and offsite improvements were available to all of the comparable sales. In
addition, all of the comparable sales sold vacant and ready for development. Information gathered
through the search and verification process indicates that all buyers and sellers were typically
motivated with no undue influences. No adjustments are warranted for this factor.
Market Conditions
The next adjustment was made to account for the influence of change in market conditions between
the transaction dates and the date of valuation. The comparable sales have transacted within the last
three years. According to local brokers, there has only been limited development activity in the
Ashland City area, as the lack of available financing has slowed down new development and land
acquisition in the area. This has resulted in no significant pressure on land prices. Accordingly, no
adjustments are warranted for this factor.
Page 88
Location
The location adjustment is the next category considered.
Factors such as the quality of the
surrounding improvements, proximity to arterials and business centers and convenience to residential
neighborhoods are all influences that affect the location and, hence, the value of a site.
The subject property will be located in Ashland City, Tennessee, within a planned unit development
that currently is improved with a multi-family apartment complex. The subject’s site is also located
along a well traveled area roadway (Highway 12 South), which provides direct access to the
downtown section of Ashland City (approximately two miles south) and is improved with several
significant commercial and retail land uses. The majority of development in the subject’s area is
located along Highway 12 South. Given this factor, the subject’s neighborhood is defined as a onemile radius from the subject.
Comparable Sale 1 is located 6.1 miles east of the subject in a less developed section of Nashville,
approximately 3.2 miles east of the border between Cheatham and Davidson Counties. This sale is
also located on Highway 12 South (referred to as Ashland City Highway in Davidson County) and is
positioned within a neighborhood that is similar to the subject’s area. This parcel also possesses
similar access and frontage characteristics to the subject’s site. At the time of sale the site was vacant
and the intensions of the buyer are currently unclear. The overall quality and condition of the
surroundings and local demographics are similar to the subject’s neighborhood. This parcel is the most
similar to the subject’s site and required no adjustment.
Comparable Sale 2 is located 12.0 miles southeast of the subject in a residential section of Nashville.
The site sold vacant and was scheduled to be improved with a 98-unit townhome community (Harpes
Spring Village). However, given the slowdown in the Nashville area housing market, plans for the
development of this community are currently on hold. Although the parcel is located on a moderately
traveled road, it is visible from U.S. Intestate 40. The parcel is also located adjacent to Somerset
Farms, a single-family residential home community that was constructed in the late 1990s. Other
surrounding uses predominantly consist of single-family residential homes and vacant land. The
overall quality and condition of the surroundings are similar to the subject’s neighborhood. However,
Page 89
the local demographics are superior, as the parcel is located in a more affluent area than the subject’s
neighborhood. Accordingly, a downward adjustment is warranted.
Comparable Sale 3 is located 11.3 miles east of the subject in northwestern Nashville. It is located on
a lightly traveled local roadway and the immediately surrounding uses are either vacant land or
residentially supportive commercial uses. However, the area is part of a larger residential area. Land
uses in the parcel's immediate area appear to be in fair condition. The overall quality and condition of
the surroundings and local demographics are similar to the subject’s neighborhood and no adjusted is
warranted.
Zoning
The subject site is zoned in a PUD (Planned Unit Development), which predominantly includes the
development of the subject and an existing multifamily apartment complex. However, according to
local planning officials, any proposed use within a PUD is considered to be an allowable use. Land
Sale 1 is located in a commercial zone that will allow the development of a diverse range of allowable
land uses. Some of these land uses are capable of generating a consistent cash flow stream. Given this
factor, no adjustment was applied to Land Sale 1.
Land Sale 2 is zoned “Special Project”, with the only allowable use being a proposed 98-unit
townhome community. The development of the community is currently on hold. If the current owner
desires to develop a different use on the parcel, the owner will have to have the site rezoned. This
severely restricts the development potential of the site. Therefore, this sale was adjusted upward.
Land Sale 3 is zoned R-10, which only allows for construction of a one- and two-family residential
homes. Given the limited number of allowable uses for this site, this sale received an upward zoning
adjustment.
Page 90
Topography
The subject property’s slopes upward to the east, but this will not hinder its overall utility. All of the
comparable sales also have functional topography. As such, no adjustments are warranted.
Shape
The shape of a land parcel is a primary factor in determining the utility of the site. It limits as well as
strongly influences the type of configuration of the improvements developed on the land. The subject
site is irregular in shape. The shape is adequate for most types of development. All the comparable
sales have functional shapes. No adjustments are warranted.
Exposure
This adjustment takes into consideration the positive effect upon the value of a location’s exposure
and considers the positive effect upon the value of a corner site versus an interior location. The
subject site is an interior site and will have excellent exposure along Highway 12 South. Sale 1 is
located on the same roadway and will have similar exposure. Sale 2 is located on a moderately
traveled roadway, but will also possess exposure from U.S. Interstate 40. Therefore, Sale 2 possesses
superior exposure to the subject’s site. Given this factor, this sale received a downward adjustment.
Sale 3 will have exposure on a lightly traveled residential roadway and received an upward
adjustment.
Size
The subject property contains an area of 191,882 square feet, or 4.405 acres. The comparable sales
range in size from 104,980 to 251,777 square feet. Typically, a larger property will sell for a lower
price per square foot compared to an otherwise similar but smaller property. All of the comparables
sales vary in size from the subject’s site, but not to the degree that require any adjustment.
The Comparable Land Sales Adjustment Grid is presented below:
Page 91
Comparable Land Data Adjustment Grid
Subject
1
2
1164 Vantage Pointe 5110 Ashland City
7960 Coley Davis
Road
Highway
Road
Ashland City
Nashville
Nashville
Parcel Data
Parcel Number
Zoning
Topography
Shape
Corner/Interior
Size (SF)
Size (Acres)
Sales Data
Recording Doc. #
Date
Interest
Price
Price Per SF
Adjustments
Property Rights
Nashville
Not Applicable
067-00-0-145.00
141-00-0-088.00
070-02-0-001.00
PUD
Level
Irregular
Interior
191,882
4.41
CL
Moderately Sloping
Irregular
Interior
127,631
2.93
SP
Level
Irregular
Interior
251,777
5.78
R10
Level
Irregular
Interior
104,980
2.41
N/A
N/A
Fee simple
N/A
N/A
20110503-0033764
4/28/11
Fee simple
$245,500
$1.92
2009000312221
7/7/09
Fee simple
$1,000,000
$3.97
20081030-0108408
10/30/08
Fee simple
$125,000
$1.19
0
245,500
0
245,500
0
245,500
0
$245,500
$1.92
0
1,000,000
0
1,000,000
0
1,000,000
0
$1,000,000
$3.97
0
125,000
0
125,000
0
125,000
0
$125,000
$1.19
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
$1.92
$1.92
-20.0%
10.0%
0.0%
0.0%
-20.0%
0.0%
-30.0%
$2.78
$2.78
0.0%
10.0%
0.0%
0.0%
10.0%
0.0%
20.0%
$1.43
$1.43
Financing
Conditions of Sale
Market Conditions
Adjusted Sale Price
Adjusted Price Per SF
Adjustments
Location
Zoning
Topography
Shape
Exposure
Size
Overall Adjustment
Adjusted Price Per SF
Low
High
Mean
Median
$1.43
$2.78
$2.04
$1.92
Conclusion
$2.00
Rounded
3
2810 Tucker Road
x
191,882
$383,764
$380,000
Page 92
CONCLUSION OF LAND VALUE
After adjustments, the above comparable sales indicate a range in value of $1.43 to $2.78 per square
foot, with a mean of $2.04 and a median of $1.92 per square foot. The comparable sales require net
overall adjustments of -30% to 20%. Sale 1 is very similar to the subject’s site, requires no adjustment
and is given primary emphasis. Sale 2 and 3 both required adjustment for zoning and exposure and
Sale 2 also required a location adjustment. The land value is therefore estimated as follows:
$2.00 per SF × 191,882 SF =
Rounded
$383,764
$380,000
The subject site is valued as raw land. The current owner has made several improvements to the site
including extending utilities, clearing, and constructing a mandatory construction road. These items
add value to the site. Since land typically sells as raw land without these items or entitlements, these
items are added to the value of the raw land below:
Land Value (Raw Land)
Prepaid Items
Extend Electrical Service to Site
Construct Code Mandated Construction Road, $50,000
Extend Fiber Optics to the Site
Clearing Grubbing and Preliminary Site Preparation
Extend Sewer Lines to the Site
Extend Water Lines to the Site
Prepaid Total:
Value of Site with Improvements
Rounded
$380,000
$6,500
50,000
97,000
22,500
29,325
25,650
$230,975
$610,975
$610,000
BUILDING AND SITE IMPROVEMENTS VALUATION
The building and land improvements have been valued on the basis of replacement cost new less
accrued depreciation. The cost new was estimated via the Calculator Cost Method with cost factors
obtained from Marshall Valuation Service, a nationally recognized cost manual. The unit cost is
based on gross building area. Marshall Valuation Service includes all direct costs and the following
indirect costs:
Page 93
§
§
§
§
Plans, specifications and building permits.
The cost of interim money during normal periods of construction, not discount
points or permanent financing charges.
Sales tax on materials.
Contractor’s overhead and profit, including workman’s compensation, fire and
liability insurance, and unemployment insurance.
DIRECT COSTS
Direct costs include only the hard costs associated with the construction of the building.
The
Calculator Cost Method from Marshall Valuation Service has been utilized. This method provides the
average base cost for typical buildings classified by construction class and quality of construction.
The subject is a proposed assisted living facility that will contain 60 assisted living units (60 beds) and
20 memory care assisted living units (20 beds), totaling 81,252 square feet.
The quality of
construction is expected to be good and the condition of the improvements is assumed new. The base
cost per square foot of gross building area is as follows:
Category
Section/Page
Quality
Base Cost
multiple residences
elderly assisted living
12/20
good
$96.08
Adjustments to the base cost include fire sprinklers, elevators, height, perimeter, time and location.
Site improvements include all improvements excluding the building. These typically include parking
lots, signage, fencing, lighting, landscaping and walkways. In calculating these costs, the Cost-PerSquare-Foot Method from Marshall Valuation Service was used and any extra improvement costs not
covered by this method were added. Site improvements are estimated on a price per square foot of the
site area less the building footprint. This calculation is as follows:
Vantage Pointe Village at Ashland City
Site Improvements
Site Size
191,881
Building Footprint
20,313
Site Improvements
171,568
Price per SF of Improvements
$2.00
Total
$343,136
Rounded
$340,000
Page 94
Comparable Cost Method
In addition to using Marshall Valuation Service to estimate the direct cost of the subject facility,
construction costs for new assisted living projects have been considered.
The following table
summarizes construction costs from recently developed assisted living projects:
Facility
City, State
Comparable Construction Cost Data
Building
Year
Building Cost
Quality Size (SF) Units Built
$
PSF Per Unit
$
FF&E
Per Unit
1) Bressi Ranch
Carlsbad, California
Excellent
39,550
80
2009 $10,705,000
$270.67 $133,813
$775,000
$9,688
2) Ashton Plantation
Luling, Louisiana
Excellent
55,014
60
2010
$7,402,656
$134.56 $123,378
$250,000
$4,167
Good
68,003
94
2010
$7,270,300
$106.91
$500,000
$5,319
4) Ambassador at Scarsdale
Scarsdale, New York
Excellent
118,767
115 2010 $24,408,700
$205.52 $212,250
5) My Doctor's Inn
Sterling Heights, Michigan
Good
87,000
90
2009 $13,994,888
$160.86 $155,499
$450,000
$5,000
6) The Oasis at Brown
Mesa, Arizona
Good
40,238
50
2009
$6,649,797
$165.26 $132,996
$280,000
$5,600
7) Assisted Living of Pahrump
Good
49,855
60
Pahrump, Nevada
Year Built - May also be date of construction contract/bid.
Total Cost - Excludes land, fill up, FF&E and entrepreneurial profit.
2009
$6,048,269
$121.32 $100,804
$280,000
$4,667
3) Grace Assisted Living
Farr West, Utah
$77,344
$2,000,000 $17,391
The building costs indicate a range of $106.91 to $270.67 per square foot, or $77,344 to $212,250 per
unit. However, adjustments for time and location can be applied to refine the indicated range for the
subject’s location. The following grid applies time and location factors to each of the projects:
Page 95
Adjusted Comparable Construction Cost Data
Time Adjustment
Location Adjustments
Building Cost Year Factor Adj Cost
Local National Avg Subj Factor Adj Cost
Facility
Bressi Ranch
PSF
Per Unit
$10,705,000
2009 1.025
$10,972,625
1.17
$9,378,312
0.91
$8,534,264 $215.78 $106,678
Ashton Plantation
$7,402,656
2010 1.000
$7,402,656
0.91
$8,134,787
0.91
$7,402,656 $134.56 $123,378
Grace Assisted Living
$7,270,300
2010 1.000
$7,270,300
0.97
$7,495,155
0.91
$6,820,591 $100.30
Ambassador at Scarsdale
$24,408,700
2010 1.000
$24,408,700
1.31
$18,632,595
0.91
$16,955,662 $142.76 $147,441
My Doctor's Inn
$13,994,888
2009 1.032
$14,442,724
1.15
$12,558,891
0.91
$11,428,591 $131.36 $126,984
The Oasis at Brown
$6,649,797
2009 1.048
$6,968,987
0.97
$7,184,523
0.91
$6,537,916 $162.48 $130,758
Assisted Living of Pahrump
$6,048,269
2009 1.052
$6,362,779
1.16
$5,485,154
0.91
$4,991,490 $100.12
$83,192
$100.12
$215.78
$134.56
$141.05
$72,559
$147,441
$123,378
$112,999
Low
High
Median
Mean
Time Adjustment - Marshall Valuation - Sec 98, Pgs 15-36; Local Adjustment - Sec 99
$72,559
After adjusting for time and location, the comparable data indicates a range of $100.12 to $215.78 per
square foot and $72,559 to $147,441 per unit. The subject’s quality of construction is assumed to be
good, which indicates a price per square foot similar to Grace Assisted Living, My Doctor’s Inn, The
Oasis at Brown, or Assisted Living of Pahrump. The Oasis at Brown is a smaller property. Thus, its
per-square-foot construction costs are higher. Based on the data presented above, a direct cost of
$105.00 per square foot is estimated.
Base Cost
Gross Building Area
Total Direct Costs
$105.00
81,252
$8,531,460
Direct Cost Summary and Reconciliation
The two methods indicate a direct cost of $7,739,167 to $8,531,460 and are supportive of one another.
The comparable cost method is given more emphasis, as it is based on actual current construction
costs of assisted living facilities adjusted for time and location. Therefore, the direct cost estimated in
the analysis is $8,400,000. The following is a summary of the direct costs:
Page 96
Summary of Direct Costs
Marshall Valuation Service
Base Cost
$96.08
$/SF Adjustments
Sprinklers
3.00
Elevators
0.00
$99.08
Multipliers
Height
1.00
Perimeter
1.00
Time
1.01
Location
0.91
Adjusted Base Cost
$91.06
Gross Building Area
81,252
Direct Cost - Buildings
Direct Cost - Site Improvements
Total Direct Costs
Marshall Valuation Service Cost PSF
$7,399,167
340,000
$7,739,167
$95.25
Comparable Cost Method
Base Cost
Gross Building Area
Total Direct Costs
$8,531,460
Concluded Direct Costs
$105.00
81,252
$8,400,000
INDIRECT COSTS
The indirect costs include such items as financing points, the property taxes on land during
construction, revenue loss during construction, marketing and entrepreneurial profit.
Financing: Financing points are estimated at 2%, based on a 75% loan-to-value ratio
of the direct costs of the building and site improvement, plus land value and
equipment.
Property Taxes: Taxes are calculated based on the market value of the land during
construction, assumed to take 12 months. This time frame is based on estimations
received from contractors who specialize in the construction of convalescent hospitals.
Entrepreneurial Profit: This profit is a necessary element in the enticement for
undertaking the cost and risks associated with developing a property such as the
subject. The amount of entrepreneurial profit varies according to economic conditions
and types of development, exhibiting a fairly wide range. An entrepreneurial profit of
of direct and indirect costs is utilized in this analysis.
Marketing: A marketing expense is estimated in order to account for the initial
marketing effort required to bring a property to a stabilized level. Based upon
Page 97
experiences of several national and regional providers, this expense ranges from
$1,500 to $3,500 per unit. An estimate of $2,500 per unit is utilized.
Revenue Loss: This expense accounts for the difference in revenue between a
stabilized property and a property in the initial absorption period. This expense is
based upon an absorption period of 24 months, multiplied by the number of units to be
absorbed, multiplied by an average monthly revenue, which equals a total potential
revenue loss. Since the absorption of units will occur gradually over time, the
midpoint is utilized. Therefore, the total revenue loss is divided in half, which is the
average loss. This amount is further reduced by 40% to account for lower variable
expenses during the absorption period. Therefore, the revenue loss during absorption
is estimated as follows:
Revenue Loss
Absorption Period
Stabilized AMC
Less Beds Pre Leased
Remaining Beds to be Absorbed
Average Monthly Revenue
Total Estimated Loss
Average Loss
% offset by reduced expenses
Revenue loss
Rounded
24
73.2
14.6
58.6
$4,036
$5,672,836
$2,836,418
40.0%
$1,701,851
$1,700,000
DEPRECIATION
Depreciation of a structure is its loss in value due to physical deterioration and obsolescence. These
terms are defined as follows:
Physical Deterioration: The loss in value due to ordinary wear and tear, i.e., age and
natural forces taking their toll on the improvements. This begins at the time the
building is completed and continues throughout its physical life.
Functional Obsolescence: An element of accrued depreciation resulting from
deficiencies or superadequacies in the structure.
External Obsolescence: An element of accrued depreciation; a defect, usually
incurable, caused by negative influences outside a site and generally incurable on the
part of the owner, landlord or tenant.
The assignment of an economic life assumes that, except for the building shell and foundation,
shorter-lived building components will be replaced periodically over the life of the building.
Page 98
The subject is a proposed assisted living and memory care facility. The quality of construction is
assumed to be good and the condition of improvements will be new upon completion of construction,
and is assumed to exhibit no physical depreciation. No deferred maintenance is expected; therefore,
no depreciation is estimated in the analysis.
Considering those factors that influence the subject’s total economic life, the subject is estimated to
have an economic life of 60 years. Economic life is the period over which the improvements to the
real estate contribute to the value of the property.
No functional or external obsolescence is expected.
EQUIPMENT VALUATION
Depreciated equipment value in assisted living facilities typically range from $3,500 to $9,500 per
unit. The low end of this range represents equipment that is either sparse in quantity, low in quality or
highly depreciated. The upper end of the range would be expected at a newer facility or a facility with
a higher percentage of private rooms. The estimated equipment value per unit is calculated as follows:
$7,500 per bed x 80 beds
Rounded
=
$600,000
$600,000
RECONCILIATION WITH MANAGEMENT’S COST SCHEDULE
The cost analysis (see Summary of Cost Approach below) is based on estimates of both national and
regional construction costs provided by Marshall Valuation Service, as well as actual cost data from
recently constructed assisted living facilities. The following table compares construction costs based
on Management’s construction budget and the appraiser’s cost estimate:
Page 99
Cost Schedule Reconciliation
Management
Structures and Site Improvements
$4,955,599
General Requirements
495,000
Contingencies and Other Construction Costs
632,252
Design and Pre-Construction Costs
318,160
Land
690,000
7,091,011
Subtotal
Financing and Other Closing Costs
661,638
FF&E
350,000
Marketing
129,000
Other Development Costs
38,094
Revenue Loss
1,251,579
Entrepreneurial Profit
0
$9,521,322
Total
Appraisal
$8,400,000
0
0
0
380,000
8,780,000
150,000
600,000
120,000
0
1,700,000
1,550,000
$12,900,000
The appraisal includes $1,550,000 for Entrepreneurial Profit which is not accounted for in
Management’s Construction Cost Schedule. Adjusting for this, the adjusted Management total cost of
$11,071,322 is closer to the appraisal cost estimate. The Management cost estimate seems low but
feasible given the location of the proposed facility.
The Cost Approach is summarized below:
Page 100
Summary of Cost Approach
Concluded Direct Costs
Indirect Costs
Financing Points
$140,700
Taxes During Construction
4,750
Marketing
120,000
Revenue Loss
1,700,000
1,550,000
Total Indirect Costs
Replacement Cost New
$3,515,450
$11,915,450
Depreciation
Deferred Maintenance
Physical - Buildings
Physical - Site Improvements
Functional Obsolescence
External Obsolescence
Total Depreciation
Depreciated Replacement Cost
$0
$11,915,450
Land Value
Equipment
$8,400,000
$0
0
0
0
0
$380,000
600,000
Indicated Value - Cost Approach
Rounded
$12,895,450
$12,900,000
COST APPROACH SUMMARY
Based on the aforementioned data and analysis, the market value, via the Cost Approach of the assets
comprising the subject property, is represented in the following rounded amount:
Summary of Cost Approach
Land
Improvements
Furniture, Fixture and Equipment
Total
INSURABLE VALUE
“Insurable value” is defined as follows:
$380,000
11,920,000
600,000
$12,900,000
Page 101
Value used by insurance companies as the basis for insurance. Often considered to be
replacement or reproduction cost less deterioration and non-insurable items.
Sometimes cash value or market value but often entirely a cost concept. (Marshall &
Swift, Section 3, Page 2)
For the purposes of this report, insurable value is estimated by adding the cost of furniture, fixtures
and equipment to the replacement cost new. Insurable value is estimated as follows:
Summary of Insurable Value
Replacement Cost New
$11,915,450
Less
Financing Points
-$140,700
Marketing
-120,000
Revenue Loss
-1,700,000
-1,550,000
Equipment
600,000
Total
$9,004,750
SALES COMPARISON APPROACH
The Sales Comparison Approach is a method of estimating value by comparing prices paid for similar
properties. Property prices are a direct function of the balance between supply and demand for real
estate. This approach, like the Cost Approach, is based upon the principle of substitution. The
principle of substitution implies that a prudent investor will not pay more for a property than it would
cost to buy a substitute property with similar utility and desirability. The reliability of this approach is
dependent upon the availability of recent sales or listings of competitive properties in the market and
the degree of comparability of each sale with the appraised property.
Therefore, the sales used in this are analyzed as follows:
§
Qualitative Analysis: This is a technique used for analyzing comparable sales in
which the characteristics of a comparable facility are rated as inferior, similar or
superior to the subject. This analysis does not attempt to make adjustments to the
comparable sales, but rather rates the sales in comparison to the subject. A value
Page 102
indication can then be determined by considering the comparable sale price per
unit and its relative ranking to the subject.
§
Quantitative Analysis: This analysis adjusts the price per unit of the comparable
sales based on net operating income (NOI) per unit compared to the subject’s
estimated NOI per unit derived in the Income Approach.
§
Effective Gross Income Analysis: The effective gross income multiplier (EGIM)
is applied to the subject’s effective gross income developed in the Income
Approach. The appropriate EGIM is obtained from other recent transactions of
similar facilities.
The following procedures are utilized in the application of the Sales Comparison Approach:
§
Research the market for information on sales transactions, listings and offers to
purchase or sell involving properties that are similar to the subject property in
terms of property type, date of sale, size, physical condition, location, zoning and
highest and best use. Due to the lack of recent sales in the subject’s state of
Tennessee, the market area is determined to also include the states of North
Carolina, Massachusetts and Ohio. Although differences exist between the
subject’s state of Tennessee and the other sales’ states, they share similar
proximity and demographic characteristics. As such, facilities in this area compete
with each other for similar investors. Several sources were utilized to research
sales.
§
Verify the information by confirming that the data obtained are factually accurate
and that the transactions reflect arm's-length market considerations. Verification
was performed through discussions with one or more of the following parties:
buyer, seller and/or the listing or selling brokers.
§
Select relevant units of comparison and develop a comparative analysis for each
unit. During the verification process, the unit of comparison most commonly used
by buyers, sellers and brokers was the price per unit. As a test of reasonableness,
a second unit of comparison, the effective gross income multiplier, has been
utilized.
§
Compare comparable sale properties with the subject property using the elements
of comparison and adjust the price of each comparable to the subject property.
Information sheets, photographs and a map of all comparable sales are presented
in the addendum. The selected properties used are the highest and best use of
their respective sites.
§
Reconcile the various value indications produced from the analysis of comparable
data into a single value indication.
The comparable facility transactions are presented below, followed by an analysis:
Page 103
Facility
Units
Comparable Improved Sales Data
Year
Sales
Sales
Built
Date
Price
Price/
Units
Occupancy
at Sale
NOI/
Units
EGIM
Cap.
Rate (Ro)
1 The Terrace at Mountain Creek
Chattanooga, TN
116
1985
8/31/2010
$8,500,000
$73,276
97.0%
$6,969
2.42
9.5%
2 Spring Arbor of Hickory
Hickory, NC
43
1995
4/30/2009
$4,750,000
$110,465
91.6%
$9,173
2.21
8.3%
3 Two MA ALFs
Acton and Franklin, MA
176
1999/2000
4/30/2010
$43,000,000
$244,318
97.0%
$19,568
4.37
8.0%
4 The Manor at Autumn Hills
Niles, OH
51
1998
5/27/2008
$6,200,000
$121,569
N/A
$11,450
3.60
9.4%
5 Carraige Court of Hillard
Hilliard, OH
102
1998
12/22/2010
$17,500,000
$171,569
95.0%
$15,920
3.80
9.3%
6 Residence of Chardon
Chardon, OH
42
2000
5/25/2011
$4,375,000
$104,167
100.0%
$8,974
2.61
8.6%
80
2013
N/A
N/A
N/A
91.5%
$14,995
N/A
N/A
Ashland City, TN
Page 104
PRICE PER UNIT COMPARISON – ASSISTED LIVING
As with nursing facilities the age, construction quality, and condition of a facility are interrelated
factors. The age and condition of a building must be considered if there is physical depreciation or
functional obsolescence. Construction design and materials as well as routine maintenance affect the
degree of depreciation and obsolescence. The following charts illustrate the average price per bed/unit
by age of facility, according to a survey conducted for The Senior Care Acquisition Report, Sixteenth
Edition, 2011, published by Irving Levin Associates.
Overall, occupancy is an important factor, impacting the profitability of a facility. Generally, a higher
occupancy rate translates into a lower expense ratio. In a well-managed facility wherein expenses are
contained at reasonable levels, an increase in revenue will result in an increase in profitability. Since
the profitability of a business is a key element in determining its value, facilities with a high
occupancy level tend to be more valuable. Economics or NOI per bed/unit often reflects other factors
of a facility, such as its location or age and condition. However, economics in and of itself will often
have a pronounced influence on value.
Building size can be analyzed on a gross-building-size-per-bed/unit basis. A low area-per-bed ratio
may indicate overcrowding or crowdedness in general, characteristic of facilities with large multibed
wards. Assisted living facilities with high area-per-bed ratios often have larger numbers of one-bed
private rooms, which tend to achieve higher rents.
Page 105
According to a survey conducted for The Senior Care Acquisition Report, Sixteenth Edition, 2011,
published by Irving Levin Associates, the price paid per bed generally increases as the building size
per bed/unit increases. The relationship is illustrated in the following charts:
QUALITATIVE ANALYSIS
This analysis compares physical, operational and locational factors of the sales to the subject. The
following chart presents this comparison:
Page 106
Improved Sales Comparison Chart
Comparable 1
Comparable 2
Comparable 3
Subject
Vantage Pointe
Village at
Ashland City
The Terrace at
Mountain Creek
Spring Arbor of
Hickory
City
Ashland City
Chattanooga
Hickory
State
TN
TN
NC
MA
Locational
Population
Median Housing Value
Increasing
$39,777
$215,923
Increasing
$37,260
$126,500
Increasing
$42,014
$145,114
Increasing
$117,452
$477,755
Decreasing
$24,944
$97,921
Stable
$35,848
$84,201
Stable
$58,816
$179,569
80
1,016
2013
New
116
944
1985
Good
43
625
1995
Average
176
819
1999/2000
Average
51
794
1998
Average
102
678
1998
Average
42
677
2000
Average
$4,036
91.5%
66.2%
$14,995
$2,597
97.0%
76.9%
$6,969
$4,556
91.6%
81.7%
$9,173
$4,803
97.0%
65.0%
$19,568
N/A
N/A
66.1%
$11,450
$3,964
95.0%
64.8%
$15,920
$3,326
100.0%
77.5%
$8,974
100.0%
N/A
N/A
N/A
N/A
N/A
62.0%
38.0%
N/A
100.0%
N/A
N/A
100.0%
N/A
N/A
100.0%
N/A
N/A
100.0%
N/A
N/A
N/A
N/A
$8,500,000
$73,276
$4,750,000
$110,465
$43,000,000
$244,318
$6,200,000
$121,569
$17,500,000
$171,569
$4,375,000
$104,167
Name
Physical
Units
GSF Per Unit
Year Built
Overall Condition
Operating
Net Revenue PUM
Occupancy
Expense Ratio
NOI Per Unit
Payor Mix
Private Pay/Other
Medicaid
Medicare
Total Price
Total Price Per Unit
Two MA ALFs
Acton and
Franklin
Comparable 4
Comparable 5
Comparable 6
The Manor at
Autumn Hills
Carriage Court of
Hilliard
Residence of
Chardon
Niles
Hilliard
Chardon
OH
OH
OH
T he Subject's NOI Per Unit is derived from the Income Approach
Improved Sale 1 is located in Chattanooga, Tennessee. Median household income and housing values
are similar to the subject's location. Overall, the sale's location is similar to the subject. The sale was
built in 1985 and is in good overall condition. Overall, the sale's age and condition are inferior to the
subject. Net revenue per unit month of $2,597.37 is inferior to the subject's net revenue per unit
month of $4,036.34. Occupancy rate at the time of sale of 97.0% is superior to the subject's estimated
occupancy of 91.5%. The expense ratio of 76.9% is inferior to the subject's expense ratio of 66.2%.
The NOI per unit was $6,969, which is inferior to the subject's NOI per unit of $14,995.
Improved Sale 2 is located in Hickory, North Carolina. Median household income and housing values
are similar to the subject's location. Overall, the sale's location is similar to the subject. The sale was
built in 1995 and is in average overall condition. Overall, the sale's age and condition are inferior to
the subject. Net revenue per unit month of $4,555.56 is superior to the subject's net revenue per unit
month of $4,036.34. Occupancy rate at the time of sale of 91.6% is similar to the subject's estimated
occupancy of 91.5%. The expense ratio of 81.7% is inferior to the subject's expense ratio of 66.2%.
The NOI per unit was $9,173, which is inferior to the subject's NOI per unit of $14,995.
Page 107
Improved Sale 3 is located in Acton and Franklin, Massachusetts. Median household income and
housing values are superior to the subject's location. Overall, the sale's location is superior to the
subject. The sale was built in 1999/2000 and is in average overall condition. Overall, the sale's age
and condition are inferior to the subject. Net revenue per unit month of $4803.19 is superior to the
subject's net revenue per unit month of $4036.34. Occupancy rate at the time of sale of 97.0% is
superior to the subject's estimated occupancy of 91.5%. The expense ratio of 65.0% is similar to the
subject's expense ratio of 66.2%. The NOI per unit was $19,568, which is superior to the subject's
NOI per unit of $14,995.
Improved Sale 4 is located in Niles, Ohio. Median household income and housing values are inferior
to the subject's location. Overall, the sale's location is inferior to the subject. The sale was built in
1998 and is in average overall condition. Overall, the sale's age and condition are inferior to the
subject. The expense ratio of 66.1% is similar to the subject's expense ratio of 66.2%. The NOI per
unit was $11,450, which is inferior to the subject's NOI per unit of $14,995.
Improved Sale 5 is located in Hilliard, Ohio. Median household income is similar to the subject's
location, while median housing values are inferior to the subject's location. Overall, the sale's location
is inferior to the subject. The sale was built in 1998 and is in average overall condition. Overall, the
sale's age and condition are inferior to the subject. Net revenue per unit month of $3,964.34 is similar
to the subject's net revenue per unit month of $4,036.34. Occupancy rate at the time of sale of 95.0%
is superior to the subject's estimated occupancy of 91.5%. The expense ratio of 64.8% is similar to the
subject's expense ratio of 66.2%. The NOI per unit was $15,920, which is superior to the subject's
Improved Sale 6 is located in Chardon, Ohio. Median household income is superior to the subject's
location, while median housing values are similar to the subject's location. Overall, the sale's location
is similar to the subject. The sale was built in 2000 and is in average overall condition. Overall, the
sale's age and condition are inferior to the subject. Net revenue per unit month of $3,325.88 is inferior
to the subject's net revenue per unit month of $4,036.34. Occupancy rate at the time of sale of 100.0%
is superior to the subject's estimated occupancy of 91.5%. The expense ratio of 77.5% is inferior to
Page 108
the subject's expense ratio of 66.2%. The NOI per unit was $8,974, which is inferior to the subject's
CONCLUSION
Unadjusted, the sales range from $73,276 to $244,318. Sales 3 and 5 are operationally superior to the
subject and indicate a value per bed below $171,569. Sales 1, 2, 4 and 6 are operationally inferior to
the subject. Sale 4 is the most operationally similar to the subject of these sales, indicating a value per
bed above $121,569. Therefore a value per bed between $121,569 and $171,569 is warranted for the
subject.
QUANTITATIVE ADJUSTMENTS
The following is an explanation of the adjustments made to the comparable sales used in this analysis.
Property Rights
All of the sales used in this analysis reflect the fee simple interest. No adjustments are required.
Financing
The verification process indicated that the sales prices are considered to be cash-equivalent prices. No
adjustments are warranted.
Conditions of Sale
This adjustment takes into account any unusual conditions or circumstances that may affect the sales
price. No conditions are identified that would have a noticeable impact on the sales prices of the
transactions. No adjustments are deemed necessary.
Market Conditions
The next adjustment is made to account for the influence of change in market conditions between the
transaction dates and the date of valuation. The improved sales analyzed in this valuation occurred
Page 109
between May 2008 and August 2010. Based on capitalization rates and other data, the market began
to weaken during the credit crisis of 2007. Rather than try to quantify the declines by making
downward adjustments, the conclusion of this approach considers the timing of the transactions and
places more emphasis on the current sales.
Net Operating Income (NOI) per Unit
All of the qualitative factors (physical, operational and locational) discussed have a direct result in a
property’s net operating income. Therefore, by developing a ratio between the subject's net operating
income and the net operating income of the comparable sales, an adjustment factor can be calculated
for each sale.
This adjustment factor may then be applied to the comparable sale’s price per unit to render a value
indication for the subject property. It is a fundamental assumption that the characteristics of a project
(e.g., physical, operational and locational) are reflected in the net operating income being generated
and that the resultant price per unit paid for a property has a direct relationship to the net operating
income being generated.
The advantage of basing adjustments on this method is that subjective, unsupportable individual
adjustments are avoided.
Page 110
The Adjustment Summary Grid is presented in the following table:
Comparable Improved Sales Adjustment Grid
1
2
3
Subject
City
Units
Year Built
Overall Occupancy
Building Size SF
Size Per Unit
Price
Price Per Unit
NOI Per Unit
Ashland City
Chattanooga
6
Niles
Hilliard
Chardon
80
116
43
176
51
102
42
1985
97.0%
109,463
944
$8,500,000
$73,276
$6,969
1995
91.6%
26,860
625
$4,750,000
$110,465
$9,173
1999/2000
97.0%
144,122
819
$43,000,000
$244,318
$19,568
1998
N/A
40,483
794
$6,200,000
$121,569
$11,450
1998
95.0%
69,184
678
$17,500,000
$171,569
$15,920
2000
100.0%
28,432
677
$4,375,000
$104,167
$8,974
$0
$8,500,000
$0
$8,500,000
$0
$8,500,000
$73,276
$0
$4,750,000
$0
$4,750,000
$0
$4,750,000
$110,465
$0
$43,000,000
$0
$43,000,000
$0
$43,000,000
$244,318
$0
$6,200,000
$0
$6,200,000
$0
$6,200,000
$121,569
$0
$17,500,000
$0
$17,500,000
$0
$17,500,000
$171,569
$0
$4,375,000
$0
$4,375,000
$0
$4,375,000
$104,167
Similar
Inferior
Superior
Inferior
Similar
Inferior
Similar
Inferior
Similar
Inferior
Inferior
Inferior
Superior
Inferior
Superior
Superior
Inferior
Superior
Inferior
Inferior
N/A
Inferior
Inferior
Inferior
Inferior
Inferior
Similar
Superior
Inferior
Superior
Similar
Inferior
Superior
Inferior
Inferior
Inferior
0.00
0.06
-0.05
1.14
0.00
1.15
$73,276
$84,267
$157,543
0.00
0.06
0.00
0.52
0.05
0.63
$110,465
$69,593
$180,058
-0.08
0.06
-0.05
-0.21
0.05
-0.23
$244,318
-$56,193
$188,125
0.08
0.06
0.00
0.12
0.05
0.31
$121,569
$37,686
$159,255
0.08
0.06
0.00
-0.25
0.05
-0.06
$171,569
-$10,294
$161,275
0.00
0.06
-0.05
0.61
0.05
0.67
$104,167
$69,792
$173,958
Financing
Market Conditions
Adjusted Price
Price Per Unit
Conclusion
Rounded
Acton and
Franklin
5
Proposed
91.5%
81,252
1,016
N/A
N/A
$14,995
Adjustments
Property Rights
Qualitative Anlaysis
Location
Age/Condition
Occupancy
Operation
SF Per Unit
Overall Comparison
Quantitative Adjustment
Location
Age/Condition
Occupancy
Operation
SF Per Unit
Overall Comparison
Price Per Unit
Adjustments Per Unit
Adjusted Price
Low
High
Median
Mean
Hickory
4
$157,543
$188,125
$167,616
$170,036
$162,000 x
80
=
$12,960,000
$12,960,000
After adjustments, the price per unit ranges from $157,543 to $188,125 with a median and mean of
$167,616 and $170,036 per unit, respectively. Each sale requires adjustment in relation to the subject,
and each is considered to provide a reasonable value indicator for the subject after adjustments. Sale 5
requires the least overall adjustment of -5.8% and is given primary emphasis. Sales 3 and 4 require
Page 111
overall adjustments of -23.4% to 31.0% and are given secondary emphasis. Sales 1, 2 and 6 require
larger adjustments and are given minimal emphasis. Based upon the data and analysis, a value per unit
of $162,000 is warranted for the subject. The indicated value via the Price-Per-Unit Method is
calculated as follows:
$162,000 per unit
Rounded
x
80 units
=
$12,960,000
$12,960,000
EFFECTIVE GROSS INCOME MULTIPLE
The adjusted effective gross income multipliers (EGIM) for the comparable sales were calculated by
dividing the adjusted sale price by the effective gross income. The Senior Care Acquisition Report,
Sixteenth Edition, 2011, published by Irving Levin Associates, Inc., indicates that the average and
median EGIMs in 2010 were 2.9 and 2.6, respectively.
The sales indicate a range from 2.21x to 4.37x of adjusted effective gross income. The following table
summarizes the sales’ expense ratio and EGIM:
Comparison of Expense Ratio to EGIM
Sale
Expense Ratio
EGIM
5
64.8%
3.80
3
65.0%
4.37
4
66.1%
3.60
Subject
66.2%
1
76.9%
2.42
6
77.5%
2.61
2
81.7%
2.21
There is an inverse relationship between expense ratio and EGIM. As expense ratio increases, EGIM
decreases. The subject’s expense ratio is closest to comparable sales 1 and 4, which indicate an EGIM
between 2.42 and 3.60. Given the subject’s projected expense ratio, age and location, an EGIM of
3.50 has been utilized for the subject. The indicated value via the EGIM method is calculated as
follows:
Page 112
3.50
Rounded
x
$3,545,523
=
$12,409,330
$12,410,000
SALES COMPARISON APPROACH CONCLUSION
The two methods utilized indicate a 4.4% range in value from $12,410,000 to $12,960,000 and are
supportive of one another. Therefore, a market value has been concluded via the Sales Comparison
Approach of $12,650,000.
INCOME CAPITALIZATION APPROACH
Properties such as the subject are normally valued based on their ability to generate an income stream
characterized by their quality, quantity and desirability. Hence, analysis of a property in terms of its
ability to provide sufficient net annual return on investment capital is an important means of
developing a value indication. This estimate is developed in the Income Capitalization Approach by
capitalizing the projected net income at a rate commensurate with investment risks inherent to the
ownership of the property. Such conversion of income considers competitive returns offered by
alternative investment opportunities. When properly applied, this approach is generally considered to
provide a reliable indication of value for income-producing properties.
An initial step in the Income Capitalization Approach is to estimate the gross income, which can be
generated by the appraised property. In the case of the subject property, stabilized occupancy needs to
be estimated. Once this estimate is established, an estimate of effective gross income can be derived
for the subject. Expenses are then deducted to arrive at a property’s net operating income. The value
of the property can then be estimated through two capitalization techniques: the Direct Capitalization
Method and/or a Discounted Cash Flow Analysis (DCF).
In this report, the Direct Capitalization Method is employed to estimate the fee simple value since the
subject is at a stabilized operation.
Page 113
HISTORICAL PERFORMANCE
In estimating income and expenses for the subject property, we have relied upon financial data
provided by the subject’s management as well as on our experience in appraising properties of this
nature.
The projected data provided by Management includes the subject’s first year as stabilized budget.
Management’s budget for a full year of stabilized operations is presented.
The available revenue and expense data is analyzed on a per-unit-month basis and as a percentage of
revenue. In addition to Management’s projections for the subject, the operating data from four
comparable facilities has been analyzed. The comparable facilities utilized in this analysis are located
in Tennessee, West Virginia, Mississippi and Virginia. Although some of the comparable operating
data is from facilities in different states, it represents facilities that provide similar services and have
similar income levels. This historical and forecast data as well as the operating data is presented on the
following pages.
Page 114
Table 1 - Financial Operations Analysis
Management's Budget
Stabilized Year
Months
AMC
%
Unit Months
AL Studio (Small)
AL Studio (Large)
AL One-Bedroom
AL Two-Bedroom
Memory Care Studio (Small)
Memory Care Studio (Large)
Total
Available Months/Units
Occupancy
190
15.8
20.1%
213
17.8
22.5%
236
19.7
24.9%
70
5.8
7.4%
119
9.9
12.6%
119
9.9
12.6%
947
78.9
100.0%
960
80.0
98.6%
Management's Budget
Stabilized Year
12/31/2015
$
PUM
% of Rev.
Months
Correlated
AMC
177
199
221
66
108
108
878
960
91.5%
$
14.7
16.6
18.4
5.5
9.0
9.0
73.2
80.0
%
20.1%
22.6%
25.1%
7.5%
12.3%
12.3%
100.0%
Correlated
PUM % of Rev.
Revenue:
AL Studio (Small)
AL Studio (Large)
AL One-Bedroom
AL Two-Bedroom
Total R&B
AL Levels of Care
Second Occupants
Community Fee
Miscellaneous
Total Revenue
566,342
679,570
825,390
260,880
597,135
633,325
$3,562,642
162,060
61,320
45,000
42,631
$3,873,653
2,981
3,190
3,497
3,727
5,018
5,322
$3,762
171
65
48
45
$4,090
14.6%
17.5%
21.3%
6.7%
15.4%
16.3%
92.0%
4.2%
1.6%
1.2%
1.1%
100.0%
526,534
634,662
772,340
247,820
542,025
574,875
$3,298,257
149,328
30,660
27,750
39,528
$3,545,523
2,981
3,194
3,498
3,741
5,019
5,323
$3,755
170
35
32
45
$4,036
14.9%
17.9%
21.8%
7.0%
15.3%
16.2%
93.0%
4.2%
0.9%
0.8%
1.1%
100.0%
Expenses:
General/Administrative
Marketing
Bad Debt
Benefits/Payroll Taxes
Plant Operations
Utilities
Dietary
Housekeeping/Laundry
Personal Care
Activities & Social Services
Insurance
Subtotal
Property Taxes
Management Fee
Reserves
Total Expenses
$216,492
122,541
0
197,392
155,424
153,872
486,582
19,714
582,973
87,521
2,372
$2,024,884
23,309
0
0
$2,048,193
$229
129
0
208
164
162
514
21
616
92
3
$2,138
25
0
0
$2,163
5.6%
3.2%
0.0%
5.1%
4.0%
4.0%
12.6%
0.5%
15.0%
2.3%
0.1%
52.3%
0.6%
0.0%
0.0%
52.9%
$219,600
114,192
0
184,464
140,544
158,112
307,440
21,960
724,680
74,664
56,000
$2,001,656
135,000
177,276
32,000
$2,345,932
$250
130
0
210
160
180
350
25
825
85
64
$2,279
154
202
36
$2,671
6.2%
3.2%
0.0%
5.2%
4.0%
4.5%
8.7%
0.6%
20.4%
2.1%
1.6%
56.5%
3.8%
5.0%
0.9%
66.2%
Net Operating Income
$1,825,460
$1,928
47.1%
$1,199,591
$1,366
33.8%
Page 115
Year Built
Gross Square Foot age
Unit s
Available Resident Mont hs
Actual Resident Months
Occupancy
Payor Mi x
Private/Other
Budget Stabilized Year
1
Vantage Pointe Vill age at Ash land Ci ty
Tabl e 2 - C omparable Expe nse Data
2
Subject
Wyngat e Senior Living Communit y
Carriage House Inn
Alden Pointe
Blue Ridge Manor
Subject
6429 Earlington Lane
Parkersburg, WV
2002
37,740
70
840
796
94.8%
311 Colloredo Boulevard
Shelbyville, T N
2001-2007
40,175
59
708
600
84.7%
2 Courtland Drive
Hattiesburg, MS
N/A
N/A
40
480
466
97.0%
400 Blue Ridge Street
Martinsville, VA
2000
23,957
37
444
317
71.3%
1164 Vant age Pointe
Ashland City, T N
Proposed
81,252
80
960
878
91.5%
100.0%
100.0%
1164 Vant age Pointe
Ashland Cit y, T N
P roposed
81,252
80
960
947
98.6%
100.0%
$
100.0%
P UM
%
Correlated
100.0%
%
$1,517,322
1,290,530
525,914
$3,333,765
$1,906
1,621
661
$4,188
45.5%
38.7%
15.8%
100.0%
$2,019,986
0
0
$2,019,986
$3,367
0
0
$3,367
100.0%
0.0%
0.0%
100.0%
$1,578,062
0
20,285
$1,598,347
$3,389
0
44
$3,433
98.7%
0.0%
1.3%
100.0%
$1,594,134
76,793
64,564
$1,735,490
$5,036
243
204
$5,482
91.9%
4.4%
3.7%
100.0%
$3,298,257
149,328
97,938
$3,545,523
$3,755
170
111
$4,036
93.0%
4.2%
2.8%
100.0%
5.6%
3.2%
5.1%
4.0%
4.0%
12.6%
0.5%
15.0%
2.3%
0.1%
52.3%
0.6%
0.0%
0.0%
52.9%
$186,289
33,945
146,434
98,077
87,111
246,487
7,193
553,734
0
121,074
$1,480,344
48,110
165,814
0
$1,694,269
$234
43
184
123
109
310
9
696
0
152
$1,860
60
208
0
$2,128
5.6%
1.0%
4.4%
2.9%
2.6%
7.4%
0.2%
16.6%
0.0%
3.6%
44.4%
1.4%
5.0%
0.0%
50.8%
$219,255
6,228
162,743
68,344
76,421
172,400
26,560
408,711
24,246
36,519
$1,201,424
0
0
0
$1,201,424
$365
10
271
114
127
287
44
681
40
61
$2,002
0
0
0
$2,002
10.9%
0.3%
8.1%
3.4%
3.8%
8.5%
1.3%
20.2%
1.2%
1.8%
59.5%
0.0%
0.0%
0.0%
59.5%
$157,760
0
73,541
39,321
73,005
109,936
0
396,317
28,786
37,904
$916,570
52,191
44,260
0
$1,013,020
$339
0
158
84
157
236
0
851
62
81
$1,969
112
95
0
$2,176
9.9%
0.0%
4.6%
2.5%
4.6%
6.9%
0.0%
24.8%
1.8%
2.4%
57.3%
3.3%
2.8%
0.0%
63.4%
$132,626
0
15,269
14,253
67,182
159,435
33,688
370,185
13,280
20,873
$826,790
30,901
86,775
0
$944,466
$419
0
48
45
212
504
106
1,169
42
66
$2,612
98
274
0
$2,983
7.6%
0.0%
0.9%
0.8%
3.9%
9.2%
1.9%
21.3%
0.8%
1.2%
47.6%
1.8%
5.0%
0.0%
54.4%
$219,600
114,192
184,464
140,544
158,112
307,440
21,960
724,680
74,664
56,000
$2,001,656
135,000
177,276
32,000
$2,345,932
$250
130
210
160
180
350
25
825
85
64
$2,279
154
202
36
$2,671
6.2%
3.2%
5.2%
4.0%
4.5%
8.7%
0.6%
20.4%
2.1%
1.6%
56.5%
3.8%
5.0%
0.9%
66.2%
47.1%
$1,639,496
$2,060
49.2%
$818,562
$1,364
40.5%
$585,326
$1,257
36.6%
$791,024
$2,499
45.6%
$1,199,591
$1,366
33.8%
$3,562,642
162,060
148,951
$3,873,653
$3,762
171
157
$4,090
92.0%
4.2%
3.8%
100.0%
Expen se s:
General/Administ rat ive
Marketing
Benefits/Payroll T axes
Plant Operations
Utilit ies
Dietary
Personal Care
Insurance
Subtotal
Property T axes
Management Fee
Reserves
T otal Expenses
$216,492
122,541
197,392
155,424
153,872
486,582
19,714
582,973
87,521
2,372
$2,024,884
23,309
0
0
$2,048,193
$229
129
208
164
162
514
21
616
92
3
$2,138
25
0
0
$2,163
Ne t O perating Income
$1,825,460
$1,928
$
4
PUM
Re ve nue :
Base Revenue
AL Levels of Care
Miscellaneous
T otal Revenue
$
100.0%
3
PUM
%
T rended Year Starting 01/01/2010
T he comparable dat a has been trended upward at 2% per year beginning at the start of t he reporting period for each comparable facility.
$
PUM
%
$
PUM
%
T rended Year St art ing 01/01/2009
$
PUM
%
Page 116
UTILIZATION (PAYOR MIX)
The subject’s proposed unit mix and budgeted census are in Table 1. The subject’s census is
comprised of assisted living private pay residents in studios, one-bedroom units, and two-bedroom
units, and memory care private pay residents in studio units. The subject consists of 34 studio assisted
living units (16 small and 18 large), 20 one-bedroom assisted living units, six two-bedroom assisted
living units, and 20 memory care studio units (10 small and 10 large).
OCCUPANCY LEVELS
The licensed bed capacity for the comparable facilities reflects that some of these facilities have fewer
units than beds and are licensed to provide semiprivate accommodations. However, the majority of
these facilities only operate private units/beds, which results in a lower number of operating beds than
licensed beds. Therefore, occupancy calculated based on operating beds is a more relevant estimate.
The table below presents overall occupancy rates of the comparable assisted living facilities:
1
2
3
4
5
6
7
8
Provider
Barton House
Belmont Village
Occupied
Beds
93
69
19
93
60
110
112
80
636
Overall Occupancy S tatistics
Licensed
Operating
Beds
Occup.
Beds
Occup.
184
50.5%
99
93.9%
74
93.2%
69
100.0%
24
79.2%
20
95.0%
130
71.5%
100
93.0%
78
76.9%
65
92.3%
149
73.8%
110
100.0%
160
70.0%
115
97.4%
130
61.5%
82
97.6%
929
68.5%
660
96.4%
Memory
Care Beds
38
16
20
20
0
17
24
0
Private
Pay %
100.0%
100.0%
100.0%
60.0%
100.0%
100.0%
100.0%
100.0%
135
94.2%
This table reflects all assisted living levels of care. Based on operating beds, the weighted average
occupancy for the comparable facilities is 96.4%. The variance between licensed and operating beds
reflects that some of the facilities are licensed to provide semiprivate accommodations. However, the
majority of these facilities predominantly offer private room accommodations. In addition, with the
exception of Mary Queen of Angels, all of the comparable facilities typically only accept private pay
residents. The above data reflects that the greater Nashville area is a strong market for assisted living
Page 117
services. The accompanying tables provide a breakout of occupancy characteristics for both nonmemory care and memory care assisted living beds.
Non-Memory Care Assisted Living Occupancy
Based on operating beds, the occupancy rates of the comparable non-memory care assisted living
facilities range from 92.3% to 100.0%, with a weighted average of 96.6%. This is an indication of
stable demand for non-memory care assisted living services in the greater Nashville area.
1
2
4
5
6
7
8
Provider
Belmont Village
Assisted Living Beds
Occupied
Operating
Beds
Beds
Occup.
57
61
93.4%
53
76
60
93
88
80
507
53
80
65
93
91
82
525
100.0%
95.0%
92.3%
100.0%
96.7%
97.6%
96.6%
Memory Care Assisted Living Occupancy
Based on operating beds, the occupancy rates of the comparable memory care assisted living facilities
range from 85.0% to 100.0%, with a weighted average of 95.6%. This is an indication of stable
demand for memory care assisted living services in the greater Nashville area.
1
2
3
4
6
7
Provider
Barton House
Belmont Village
Weighted Average
Memory Care AL Occupancy S tatistics
Occupied
Operating
Beds
Beds
Occup.
36
38
94.7%
16
16
100.0%
19
20
95.0%
17
20
85.0%
17
24
129
17
24
135
100.0%
100.0%
95.6%
Page 118
The following table summarizes the stabilized census and utilization estimates used in this analysis:
AL Studio (Small)
AL Studio (Large)
AL One-Bedroom
AL Two-Bedroom
Total
Occupancy Rate
Resident Months
177
199
221
66
108
108
878
960
91.5%
AMC
14.7
16.6
18.4
5.5
9.0
9.0
73.2
80.0
Payor
Mix
20.1%
22.6%
25.1%
7.5%
12.3%
12.3%
100.0%
The correlated occupancy was derived by using an estimated occupancy rate of 92% for the assisted
living units and an occupancy rate of 90% for the memory care units. This is presented in the
following table:
Unit Type
Assisted Living
AL Studio (Small)
AL Studio (Large)
AL One-Bedroom
AL Two-Bedroom
Total
Correlated Occupancy
Number of Correlated
Units
Occupancy
Correlated
Occupied Units
16
18
20
6
60
92%
92%
92%
92%
92.0%
14.72
16.56
18.4
5.52
55.2
Memory Care
Total
10
10
20
90%
90%
90.0%
9
9
18
Overall Total
80
91.5%
73.2
REVENUE
Revenue is categorized into five categories: Room and Board, Assisted Living Levels of Care, Second
Occupant Fees, Deposits and Other Miscellaneous Revenues (including guest meals, transportation,
beautician charges, and revenue from clubhouse and model room rental). Room and Board revenues
Page 119
are further divided according to six rent types: Assisted Living – Studio (Small), Assisted Living –
Studio (Large), Assisted Living One-Bedroom, Assisted Living Two-Bedroom, Memory Care Studio
– (Small) and Memory Care Studio – (Large) units. These revenue sources are discussed below.
Room and Board Revenue
In order to determine the reasonableness of the subject’s proposed private pay rates, a survey of local
facilities was conducted. The following table presents a summary of these rates:
1
2
3
4
5
6
7
8
Provider
Barton House
Belmont Village
M in to M ax
M ean
M edian
S ubject
$2,950
$2,745
$3,110
$3,750
$4,500
$3,175
$2,500
Studio
to
$4,130
to
$2,500
to
$2,981
to
$5,175
$5,175
$3,559
$3,175
$3,194
1 Bedroom
2 Bedroom
$4,775 to $4,995
$3,800 to $3,900 $4,000
$3,950
$4,095
$5,000
$6,175
$2,860
$2,860
$3,498
to
to
$4,100 $4,675
$7,550
$7,500
Memory Care Private
$5,190
$3,845 to $4,600
$4,900
$4,590 to $4,770
$6,390
$3,100 $3,950
to $6,175 $3,950 to $7,550
$4,250
$5,535
$4,095
$4,675
$3,741
$3,845
$5,019
to $6,390
$4,898
$4,770
to $5,323
The above displayed rates are the comparable facilities’ rates for the base level of care. The majority
of non-memory care assisted living facilities in the PMA utilize tiered or a-la-carte rate structures.
Typically, more sophisticated assisted living operators utilize tiered or level-of-care rate structures,
allowing these facilities to maximize potential revenue. In a tiered rate system, facilities establish a
rate for a base level of care and charge additional fees per level of care required.
The subject will offer studio units for a base monthly rate of $2,981. Studio rates among the
comparable facilities range from $2,500 to $5,175, with a mean of $3,559. The subject’s rate is
oriented at the lower end of the range of the comparable facilities’ rates. However, given that the
subject will be located in a less affluent community than the majority of the comparable facilities, the
subject’s studio rate is priced correctly. The subject will offer one-bedroom units for monthly rates
ranging from $3,194 to $3,498, which are also oriented at the lower end of the range ($2,860 to
$6,175) of comparable facility rates and are consistent with the conclusion for the subject’s studio rate.
Page 120
The subject’s two-bedroom rate monthly base rate ($3,741) is below the range ($3,950 to $7,550) of
comparable facilities. This rate is reasonable given the lower cost of living in Cheatham County than
in Davidson County/Nashville. The subject’s private memory care assisted living rates ($5,019 to
$5,323) are within the range of the comparable rates and are reasonable given the previously
mentioned conditions.
Overall, the subject’s proposed rates are reasonable.
Based on the subject’s location, age, design appeal and market rents for similar facilities, the subject’s
proposed rates are deemed reasonable.
In accordance with HUD guidelines, the following adjustment grids have been prepared:
Page 121
Estimates of Market Rent
by Comparison
OMB Approval No. 2502-0331 (exp. 3/31/2002)
U.S. Departm ent of Housing and Urban Developm ent
Office of Housing
Federal Housing Commissioner
Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for review ing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and review ing the collection of
information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Reports Management Officer, Office of Information Policies and Systems, U.S. Department of Housing and
Urban Development, Washington, D.C. 20410-3600 and to the Office of Management and Budget, Paperw ork Reduction Project (2502-0331) Washington, D.C. 20503. Do not send completed form to either address.
1. Unit Type
AL Studio
2. Subject Property (Address)
Ashland City, TN 37015
Characteristics
3. Effective Date of Rental
4. Type of Project/Stories
5. Floor of Unit in Building
6. Project Occupancy % (Lic. Beds)
7. Concessions
8. Year Built
9. Square Foot Area
10. Number of Bedrooms
11. Number of Baths
12. Number of Rooms
13. Balc/Terrace/Patio
14. Garage or Carport
15. Equipment a) A/C
b) Kitchen Equipment
c) Meals Per Day
d) Housekeeping Services
e) Linen Services
f) Service Level
g) Unit Occupancy
h) Carpet/Drapes
i) Facility Amenities
16. Services a) Heat/Type
b) Cook/Type
c) Electricity
d) Water Cold/Hot
17. Design/Appeal
18. Project Location
19. Other:
Data
09/07/11
ALF4
N/A
N/A
None
Proposed
433
0
1
1
No
No
Yes
Yes
3
1
1
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
-
Homew ood Residence at
Brookmont Terrace
Nashville, TN 37205
Data
Adjustments
+
09/07/11
ALF2 & 3
N/A
94%
None
$177
0
1
1
No
No
Yes
Yes
3
1
1
0
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
The Waterford in Bellevue Senior Mary Queen of Angels
Living
8118-B Saw yer Brow n Road
Nashville, TN 37221
Nashville, TN 37205
Data
Adjustments
Data
Adjustments
+
+
09/07/11
09/07/11
ALF 2
ALF 3
N/A
N/A
100%
93%
None
None
2002
$137
2001
$156
N/A
0
0
1
1
1
1
No
No
No
No
Yes
Yes
Yes
Yes
3
3
1
1
1
1
0
0
Single
Single
Yes
Yes
AC/L
AC/L
Yes
Yes
N/A
N/A
Yes
Yes
Yes
Yes
Residential
Residential
Similar
Similar
Belmont Village
Nashville, TN 37215
Data
Adjustments
+
09/07/11
ALF 2
N/A
92%
None
1996
$188
4206 Stammer Place
Nashville, TN 37215
Data
Adjustments
+
09/07/11
ALF 3
N/A
97%
None
1999
$209
600
0
1
1
No
No
Yes
Yes
3
1
1
Similar
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
1710 Magnolia Boulevard
Nashville, TN 37212
Data
Adjustments
+
09/07/11
ALF 8
N/A
98%
None
1970s
$125
N/A
0
1
1
No
No
Yes
Yes
3
1
1
Similar
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
0
1
1
No
No
Yes
Yes
3
1
1
Similar
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
20. Unit Rent per Month
$3,540
$2,745
$3,110
$3,750
$4,175
$2,500
21. Total Adjustment
$177
$137
$156
$188
$209
$125
22. Indicated Rent
$3,717
$2,882
$3,266
$3,938
$4,384
$2,625
23. Correlated Subject Rent
$3,094
Remarks On Adjustments:
The proposed subject's actual monthly rates are $2,981 to $3,194/month for an AL studio unit, $3,498/month for an AL one-bedroom unit, $3,741/month for an AL tw o-bedroom unit and $5,019 to $5,323/month for a private memory care unit. All of the comparable properties
require an upw ard adjustment for inferior year built. The proposed subject's actual average private pay rate for an AL studio unit ($3,094) is w ithin the adjusted range and is deemed reasonable.
Page 122
by Comparison
OMB Approval No. 2502-0331 (exp. 3/31/2002)
U.S. Department of Housing and Urban Development
Office of Housing
Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for review ing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and review ingthe
collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Reports Management Of ficer, Of fice of Information Policies and Systems,U.S.
Department of Housing and Urban Development, Washington, D.C. 20410-3600 and to the Of fice of Management and Budget, Paperw ork Reduction Project (2502-0331) Washington, D.C. 20503. Do not send completed form to either address.
1. Unit Type
AL 1
Bedroom Ashland City, TN 37015
Characteristics
7. Concessions
8. Year Built
9. Square Foot Area
11. Number of Baths
12. Number of Rooms
c) Meals Per Day
e) Linen Services
f) Service Level
g) Unit Occupancy
h) Carpet/Drapes
b) Cook/Type
c) Electricity
d) Water Cold/Hot
17. Design/Appeal
19. Other:
Brookmont Terrace
Nashville, TN 37205
Data
Adjustments
+
09/07/11
09/07/11
ALF4
ALF2 & 3
N/A
N/A
N/A
94%
None
None
Proposed
$244
632
400
1
1
1
1
2
2
No
No
No
No
Yes
Yes
Yes
Yes
3
3
1
1
1
1
0
Single
Single
Yes
Yes
AC/L
AC/L
Yes
Yes
N/A
N/A
Yes
Yes
Yes
Yes
Residential Residential
Similar
Data
The Waterf ord in Bellevue Senior Mary Queen of Angels
Living
Belmont Village
Nashville, TN 37221
Data
Adjustments
+
09/07/11
ALF 2
N/A
100%
None
2002
$193
Nashville, TN 37215
Data
Adjustments
+
09/07/11
ALF 2
N/A
92%
None
1996
$205
4206 Stammer Place
Nashville, TN 37215
Data
Adjustments
+
09/07/11
ALF 3
N/A
97%
None
1999
$309
N/A
1
1
2
No
No
Yes
Yes
3
1
1
Similar
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
Nashville, TN 37212
Data
Adjustments
+
09/07/11
ALF 8
N/A
98%
None
1970s
$149
N/A
1
1
2
No
No
Yes
Yes
3
1
1
Similar
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
1
1
2
No
No
Yes
Yes
3
1
1
0
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
Nashville, TN 37205
Data
Adjustments
+
09/07/11
ALF 3
N/A
93%
None
2001
$201
498
1
1
2
No
No
Yes
Yes
3
1
1
0
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
1
1
2
No
No
Yes
Yes
3
1
1
Similar
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
$4,885
$3,850
$4,025
$4,095
$6,175
$2,980
$244
$193
$201
$205
$309
$149
22. Indicated Rent
$5,129
$4,043
$4,226
$4,300
$6,484
$3,129
$3,498
The proposed subject's actual monthly rates are $2,981 to $3,194/month for an AL studio unit, $3,498/month for an AL one-bedroom unit, $3,741/month for an AL tw o-bedroom unit and $5,019 to $5,323/month for a private memory care unit. All of the comparable
properties require an upw ard adjustment for inferior year built. The proposed subject's actual private pay rate for an AL one-bedroom unit ($3,498) is w ithin the adjusted range and is deemed reasonable.
Page 123
by Comparison
Office of Housing
Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for review ing instructions, searching existing data sources, gathering and maintaining the data needed, and completing
and review ing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Reports Management Officer, Office of
Information Policies and Systems, U.S. Department of Housing and Urban Development, Washington, D.C. 20410-3600 and to the Office of Management and Budget, Paperw ork Reduction Project (2502-0331) Washington, D.C. 20503. Do
not send completed form to either address.
1. Unit Type
AL 2
Bedroom Ashland City, TN 37015
Characteristics
7. Concessions
8. Year Built
9. Square Foot Area
11. Number of Baths
12. Number of Rooms
c) Meals Per Day
e) Linen Services
f) Service Level
g) Unit Occupancy
h) Carpet/Drapes
b) Cook/Type
c) Electricity
d) Water Cold/Hot
17. Design/Appeal
19. Other:
Data
09/07/11
ALF4
N/A
N/A
None
Proposed
749
2
1
3
No
No
Yes
Yes
3
1
1
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
-
The Waterford in Bellevue Senior
Living
Nashville, TN 37221
Data
Adjustments
+
09/07/11
ALF 2
N/A
100%
None
0
$200
Nashville, TN 37205
Data
Adjustments
+
09/07/11
ALF 3
N/A
93%
None
2001
$234
570
2
1
3
No
No
Yes
Yes
3
1
1
0
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
Nashville, TN 37215
Data
Adjustments
+
09/07/11
ALF 2
N/A
92%
None
1996
$378
Nashville, TN 37215
Data
Adjustments
+
09/07/11
ALF 4
N/A
100%
None
2007
$375
Nashville, TN 37212
Data
Adjustments
+
09/07/11
ALF 8
N/A
98%
None
1970s
$198
N/A
2
1
3
No
No
Yes
Yes
3
1
1
Similar
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
2
1
3
No
No
Yes
Yes
3
1
1
0
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
2
1
3
No
No
Yes
Yes
3
1
1
Similar
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
2
1
3
No
No
Yes
Yes
3
1
1
Similar
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
$4,000
$4,675
$7,550
$7,500
$3,950
$200
$234
$378
$375
$198
22. Indicated Rent
$4,200
$4,909
$7,928
$7,875
$4,148
$3,741
The proposed subject's actual monthly rates are $2,981 to $3,194/month for an AL studio unit, $3,498/month for an AL one-bedroom unit, $3,741/month for an AL tw o-bedroom unit and $5,019 to $5,323/month for a private memory care
unit. All of the comparable properties require an upw ard adjustment for inferior year built. The proposed subject's actual private pay rate for an AL tw o-bedroom unit ($3,741) is w ithin the adjusted range and is deemed reasonable.
Page 124
by Comparison
Office of Housing
Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for review ing instructions, searching existing data sources, gathering and maintaining the data needed, and completing
and review ing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Reports Management Officer, Office of
Information Policies and Systems, U.S. Department of Housing and Urban Development, Washington, D.C. 20410-3600 and to the Office of Management and Budget, Paperw ork Reduction Project (2502-0331) Washington, D.C. 20503. Do not
send completed form to either address.
1. Unit Type
Alzheim er's
Private
Characteristics
Ashland City, TN 37015
7. Concessions
8. Year Built
9. Square Foot Area
11. Number of Baths
12. Number of Rooms
15. Equipment
a) A/C
c) Meals Per Day
e) Linen Services
f) Service Level
g) Unit Occupancy
h) Carpet/Drapes
16. Services
a) Heat/Type
b) Cook/Type
c) Electricity
d) Water Cold/Hot
17. Design/Appeal
19. Other
Brookmont Terrace
Nashville, TN 37205
Data
Data
Adjustments
+
09/07/11
09/07/11
ALF4
ALF2 & 3
N/A
N/A
N/A
94%
None
None
Proposed
2000
$260
458
N/A
1
1
1
1
Varies
Varies
No
No
No
No
Yes
Yes
Yes
Yes
3
3
1
1
1
1
0
Single
Single
Yes
Yes
AC/L
AC/L
Yes
Yes
N/A
N/A
Yes
Yes
Yes
Yes
Residential Residential
Similar
The Waterford in Bellevue Senior
Living
Barton House
Nashville, TN 37221
Data
Adjustments
+
09/07/11
ALF 2
N/A
100%
None
2002
$211
N/A
1
1
Varies
No
No
Yes
Yes
3
1
1
0
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
6961 U.S. Highw ay 70
South Nashville, TN 37221
Data
Adjustments
+
09/07/11
ALF 1
N/A
95%
None
Circa 2000
$245
N/A
1
1
Varies
No
No
Yes
Yes
3
1
1
0
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
Nashville, TN 37205
Data
Adjustments
+
09/07/11
ALF 3
N/A
93%
None
2001
$234
N/A
1
1
Varies
No
No
Yes
Yes
3
1
1
0
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
Nashville, TN 37215
Data
Adjustments
+
09/07/11
ALF 4
N/A
100%
None
2007
$320
N/A
1
1
Varies
No
No
Yes
Yes
3
1
1
Similar
Single
Yes
AC/L
Yes
N/A
Yes
Yes
Residential
Similar
$5,190
$4,223
$4,900
$4,680
$6,390
$260
$211
$245
$234
$320
22. Indicated Rent
$5,450
$4,434
$5,145
$4,914
$6,710
$5,171
The proposed subject's actual monthly rates are $2,981 to $3,194/month for an AL studio unit, $3,498/month for an AL one-bedroom unit, $3,741/month for an AL tw o-bedroom unit and $5,019 to $5,323/month for a private memory care unit.
All of the comparable properties require an upw ard adjustment for inferior year built. The proposed subject's actual private pay rate for a private memory care unit ($5,171) is w ithin the adjusted range and is deemed reasonable.
Page 125
Based on the analysis, the proposed monthly rates for all unit types are deemed reasonable.
Assisted Living Levels of Care
Assisted Living Levels of Care revenue includes income from additional services provided to assisted
living residents. These additional services included assistance with bathing and grooming, daily bed
making, additional personal assistance with safety and mobility, personal laundry, daily medication
distribution, in-room meal delivery and toileting/incontinence. The following tables present the
estimated levels of care utilizations, the daily rates for each unit type, and the rate difference between
each level of care for the subject:
Traditional Assisted Living
AL Care Level Utilizaiton
Level
Mix
% to Total
1
30
50%
2
21
35%
3
9
15%
Total
60
100%
1
2
3
Studio (Small)
$98
Base
$108
$10
$118
$10
1
2
3
Studio (Large)
$105
Base
$115
$10
$125
$10
1
2
3
One-Bedroom
$115
Base
$125
$10
$135
$10
1
2
3
Two-Bedroom
$123
Base
$133
$10
$150
$17
Memory Care
MC Care Level Utilizaiton
Level
Mix
% to Total
1
16
80%
2
4
20%
Total
20
100%
1
2
Studio (Small)
$165
Base
$175
$10
1
2
Studio (Large)
$175
Base
$185
$10
A correlated estimate of $170 per occupied unit is used in this analysis. Of the comparable facilities,
Wyngate has higher Levels of Care revenue. However, this is offset by lower base rent revenues.
Page 126
Blue Ridge Manor’s Levels of Care revenues are similar to the budgeted revenues and the correlated
estimate on a percent-of-revenue basis. Carriage House and Alden Pointe did not break out Levels of
Care revenue. The proposed Level of Care revenue is deemed reasonable.
Second Occupant Fees
Management’s budget anticipates all six assisted living two-bedroom units to be doubly occupied,
yielding $61,320 in revenue. The correlated estimate estimates half of the two-bedroom units will be
doubly occupied, and thus the correlated estimated revenue from second occupant fees is $30,660.
Community Fees
The subject will charge a non-refundable deposit to incoming residents of $1,500. Most of the
competitors in the market charge a community fee. Competitors 1, 2, 3, 4, 5, 6 and 8 charge
community fees that range from $1,000 to $3,500. Competitor 7, Belmont Village, does not have a
community fee. The subject’s fee of $1,500 is within the range of the comparable facilities and is
considered reasonable. The revenues for this fee are estimated by applying a turnover rate to the
correlated occupancy and assuming that about 50% of annual resident turnover revenue will be applied
to the admission fee. The average length of stay (ALOS) for assisted living with memory care is
estimated at two years, equating to a 50.0% annual turnover. According to the 2009 State of Senior
Housing Report, the median turnover rate for assisted living with memory care is 65.4%. This
calculation is presented in the following table:
Page 127
Memory Care Assisted Living Turnover Estimate
Total Units
80
Unit Occupancy
91.5%
Occupied Units
73.2
ALOS
2
Annual Turnover
50.0%
Estimated Turnover
37.0
Move In Fees
$1,500
Annual Move in Revenue
$55,500
Estimated Collection
50.0%
Annual Revenue
$27,750
Miscellaneous
This category includes additional resident fees, including guest meals, phone and cable income,
supplies and beauty and barber revenues. Management’s budget projects Miscellaneous revenues to
be $45 per unit month in the stabilized year. A Miscellaneous revenues estimate of $45 per unit
month is utilized in the analysis. The subject’s proposed combined Second Occupant Fees, Deposits
and Miscellaneous revenues are below the comparable range and thus deemed reasonable.
The following table presents the subject’s estimated effective gross income:
Revenue:
AL Studio (Small)
AL Studio (Large)
AL One-Bedroom
AL Two-Bedroom
Total R&B
AL Levels of Care
Second Occupants
Deposits
Miscellaneous
Total Revenue
Amount
526,534
634,662
772,340
247,820
542,025
574,875
$3,298,257
149,328
30,660
27,750
39,528
$3,545,523
PUM % of Rev.
$2,981
14.9%
3,194
17.9%
3,498
21.8%
3,741
7.0%
5,019
15.3%
5,323
16.2%
3,755
93.0%
170
4.2%
35
0.9%
32
0.8%
45
1.1%
$4,036
100.0%
Page 128
Total Revenue
The following table compares Management’s projections and correlated revenue:
Subject Total Revenue Analysis
Total Revenue
PUM
Avg Monthly Census
Management's Budget
Stabilized Year
$3,873,653
$4,090
78.9
Correlated
$3,545,523
$4,036
73.2
For additional comparison, the subject’s revenues are compared to the comparable expense data
(originally presented in Table 2) in the following table:
Total Revenue
PUM
Expense
Comparable
1
$3,333,765
$4,188
Comparable Revenue Analysis
Expense
Expense
Comparable
Comparable
2
3
$2,019,986
$1,598,347
$3,367
$3,433
Expense
Comparable
4
$1,735,490
$5,482
Correlated
$3,545,523
$4,036
As indicated in the above table, the subject’s correlated revenue is within the comparable range on a
per-unit-month basis. Therefore, based on the current market levels, the subject’s revenue estimate is
deemed reasonable.
Page 129
OPERATING EXPENSES
Operating expenses consist of variable expenses that change with the occupancy, fixed expenses that
do not change with occupancy and reserves for replacement of short-lived items. As presented in
Table 1, projected operating statements are obtained for the subject. These operating expenses are
analyzed on a per-patient-day basis and percentage of net revenue. In order to determine market level
expenses, the expenses of four comparable facilities have been compared to the subject. The
comparable facilities utilized in this analysis are located in West Virginia, Virginia and Mississippi in
addition to the subject’s state of Tennessee. An explanation of the expense amounts used in this
analysis is as follows:
This category includes all wages and salaries associated with general administration as well as office
supplies, telephone, education, professional and legal fees, travel and marketing related expenses. The
following table presents the subject’s historical performance, comparable expense data and correlation
of this expense category:
Amount
PUM
% of Rev
General/Administrative Expense
Budget
Expense Comparable Data
VIG
Stabilized Year
1
2
3
4
Correlated
$216,492 $186,289 $219,255 $157,760 $132,626 $219,600
$229
$234
$365
$339
$419
$250
5.6%
5.6%
10.9%
9.9%
7.6%
6.2%
The correlated estimate is towards the low end of the comparable range. Comparable 2 includes
management fees in this category. Comparables 3 and 4 include marketing expenses in
General/Administrative expenses and Comparable 2 includes the Management Fee in this category.
Comparable 4 includes some benefits in this category. Thus, the comparable range is overstated.
Marketing
This category includes all wages and salaries associated with marketing as well as supplies and travel.
The following table presents the subject’s historical performance, comparable expense data and
correlation of this expense category:
Amount
PUM
% of Rev
Budget
Stabilized Year
$122,541
$129
3.2%
1
2
3
$33,945
$6,228
$0
$43
$10
$0
1.0%
0.3%
0.0%
VIG
Correlated
$0 $114,192
$0
$130
0.0%
3.2%
4
Expense Comparables 3 and 4 includes this expense in the General/Administrative category. The
correlated estimate is above the comparable range. The subject is a proposed facility and will need to
spend more on Marketing as compared to existing established facilities.
Page 130
This category includes employee benefits such as group health insurance, workers compensation
insurance and payroll taxes. The following table presents the subject’s historical performance,
comparable expense data and correlation of this expense category:
Amount
PUM
% of Rev
Benefits/Payroll Taxes Expense
Budget
Stabilized Year
1
2
3
$197,392 $146,434 $162,743
$73,541
$208
$184
$271
$158
5.1%
4.4%
8.1%
4.6%
VIG
4
Correlated
$15,269 $184,464
$48
$210
0.9%
5.2%
The budgeted value and the correlated estimate are within the comparable range and are considered
reasonable.
Plant Operations
This category includes all wages and salaries associated with the maintenance staff, as well as
supplies, normal maintenance and repairs. The following table presents the subject’s historical
performance, comparable expense data and correlation of this expense category:
Amount
PUM
% of Rev
Plant Operations Expense
Budget
Stabilized Year
1
2
3
$155,424
$98,077
$68,344
$39,321
$164
$123
$114
$84
4.0%
2.9%
3.4%
2.5%
VIG
4
Correlated
$14,253 $140,544
$45
$160
0.8%
4.0%
The budgeted expense and the correlated estimate are above the comparable range. The subject is
significantly larger than the comparables. The following table presents this expense on a per-squarefoot basis:
Amount
PUM
Building SF
PSF
Plant Operations Expense - Per Square Foot
Stabilized Year
1
2
3
$155,424
$98,077
$68,344
$39,321
$164
$123
$114
$84
81,252
37,740
40,175
N/A
$1.91
$2.60
$1.70
N/A
VIG
4
Correlated
$14,253 $140,544
$45
$160
23,957
81,252
$0.59
$1.73
On a per-square-foot basis, the budget amount and the correlated estimate are within the comparable
range. The correlated estimate is towards the middle of the comparable range and similar to
Comparable 2 on a per-square-foot basis. The subject is within the greater Nashville area, just 3.4
miles away from the city limits of Nashville. Comparables 1 and 3 are in urban areas with
significantly lower wage indices, while comparables 2 and 4 are in rural locations that also have
significantly lower wage indices. Due to its proximity to Nashville, the wage index at the subject
facility is significantly higher than the comparables, which leads to higher salary expenses in this
category.
Page 131
Utilities
This category includes all utilities expenses including electric, gas, water and sewer. The following
table presents the subject’s historical performance, comparable expense data and correlation of this
expense category:
Amount
PUM
% of Rev
Budget
Stabilized Year
$153,872
$162
4.0%
Utilities Expense
1
2
3
$87,111
$76,421
$73,005
$109
$127
$157
2.6%
3.8%
4.6%
VIG
4
Correlated
$67,182 $158,112
$212
$180
3.9%
4.5%
The budgeted expense and the correlated estimate are within the comparable range. Due to the
difference in building size between the subject and the comparable facilities, a per-square-foot analysis
is done and presented in the following table:
Amount
PUM
Building SF
% of Rev
Utilities Expense - Per Square Foot
Stabilized Year
1
2
3
$153,872
$87,111
$76,421
$73,005
$162.48
$109.44
$127.37
$156.80
81,252
37,740
40,175
N/A
$1.89
$2.31
$1.90
N/A
VIG
4
Correlated
$67,182 $158,112
$212.22
$180.00
23,957
81,252
$2.80
$1.95
On a per-square-foot basis, the budget amount is just below the comparable range while the correlated
estimate is within the comparable range. The correlated estimate is similar to Comparable 2 on a persquare-foot basis. As a combined expense with Plant Operations, the correlated combined expense of
$3.68 per square foot is in the middle of the comparable range of $3.39 to $4.91 per square foot.
Dietary
This category includes all wages and salaries expenses for dietary personnel, raw food costs, dietary
supplies and nutritional supplements. The following table presents the subject’s historical
Amount
PUM
% of Rev
Budget
Stabilized Year
$486,582
$514
12.6%
Dietary Expense
VIG
1
2
3
4
Correlated
$246,487 $172,400 $109,936 $159,435 $307,440
$310
$287
$236
$504
$350
7.4%
8.5%
6.9%
9.2%
8.7%
The budgeted expense is above the comparable range. The correlated estimate is closer to the
comparable values for this expense on both a per-unit-month and percent-of-revenue basis. The
correlated estimate is towards the high end of the comparable range because the subject is within the
greater Nashville area, just 3.4 miles away from the city limits of Nashville. Comparables 1 and 3 are
in urban areas with significantly lower wage indices, while comparables 2 and 4 are in rural locations
that also have significantly lower wage indices. Due to its proximity to Nashville, the wage index at
Page 132
the subject facility is significantly higher than the comparables, which leads to higher salary expenses
in this category.
This category includes wages and salaries for housekeeping and laundry staff as well as all
housekeeping and laundry-related supplies. The following table presents the subject’s historical
Amount
PUM
% of Rev
Housekeeping/Laundry Expense
Budget
Stabilized Year
1
2
3
$19,714
$7,193
$26,560
$0
$21
$9
$44
$0
0.5%
0.2%
1.3%
0.0%
VIG
4
Correlated
$33,688
$21,960
$106
$25
1.9%
0.6%
Expense Comparable 3 includes this expense within the Personal Care category. The estimated
expenses are within the comparable range and deemed reasonable.
Personal Care
This category involves the costs of all wages and salaries associated with personal care services and
medical records as well as related supplies. The following table presents the subject’s historical
Amount
PUM
% of Rev
Budget
Stabilized Year
$582,973
$616
15.0%
Personal Care Expense
VIG
1
2
3
4
Correlated
$553,734 $408,711 $396,317 $370,185 $724,680
$696
$681
$851
$1,169
$825
16.6%
20.2%
24.8%
21.3%
20.4%
Expense Comparable 1 includes Activities/Social Services in Personal Care. The subject’s budgeted
expenses for this category are below the comparable range. The correlated estimate is closer to the
expense amount at the comparable facilities on a per-unit-month and percent-of-revenue basis. The
correlated estimate of $825 per unit month and 20.4% of revenue is in the middle of the range of the
other expense comparables.
Activities/Social Services
This category includes the costs of all wages and salaries associated with activities and social services
as well as related supplies. The following table presents the subject’s historical performance,
comparable expense data and correlation of this expense category:
Amount
PUM
% of Rev
Budget
Stabilized Year
$87,521
$92
2.3%
2
3
$0
$24,246
$28,786
$0
$40
$62
0.0%
1.2%
1.8%
1
VIG
4
Correlated
$13,280
$74,664
$42
$85
0.8%
2.1%
Page 133
Expense Comparable 1 includes Activities/Social Services expenses in the Personal Care category.
The subject is within the greater Nashville area, just 3.4 miles away from the city limits of Nashville.
Comparables 1 and 3 are in urban areas with significantly lower wage indices, while comparables 2
and 4 are in rural locations that also have significantly lower wage indices. Due to its proximity to
Nashville, the wage index at the subject facility is significantly higher than the comparables, which
leads to higher salary expenses in this category.
Insurance
This includes both professional liability and property insurance for the subject facility. The following
table presents the subject’s historical performance, comparable expense data and correlation of this
expense category:
Amount
Units
Per Unit
PUM
% of Rev
Budget
Stabilized Year
$2,372
80
$30
$3
0.1%
Insurance Expense
1
2
3
$121,074
$36,519
$37,904
70
59
40
$1,730
$619
$948
$152
$61
$81
3.6%
1.8%
2.4%
4
$20,873
37
$564
$66
1.2%
VIG
Correlated
$56,000
80
$700
$64
1.6%
The subject’s budgeted insurance expenses are significantly lower than the comparable range.
According to Management, the Insurance account in the budget should be allocated thusly: 31% to
workers compensation insurance, 66% to group medical insurance (both of these have been included
in the Benefits/Payroll Expense Category) and 3% to liability insurances. The correlated expense is
increased to $700 per unit and 1.6% of revenue, which is in line with the comparable data.
Property Taxes
This category includes real estate taxes and personal property taxes. The following table presents the
subject’s historical performance, comparable expense data and correlation of this expense category:
Amount
PUM
% of Rev
Budget
Stabilized Year
$23,309
$25
0.6%
Property Taxes Expense
1
2
3
$48,110
$0
$52,191
$234
$0
$339
1.4%
0.0%
3.3%
VIG
4
Correlated
$30,901 $135,000
$419
$154
1.8%
3.8%
As discussed in the Assessment and Taxes section, after consideration of assessment comparables and
conversations with the Cheatham County Assessor, the subject is estimated to have an assessment of
$50.00 per square foot. With the 2011 tax rate at $3.25 per $100 of assessed value, the real estate tax
is estimated to be $132,000, which is significantly higher than the budgeted expense. The correlated
estimate includes $3,000 for personal property taxes. The correlated estimate is below the comparable
range on a per-unit-month basis, but above the range on a percent-of-revenue basis.
Management Fee
Management fees typically range from 4% to 6% of net revenue (effective gross income) for
healthcare facilities of the subject’s scope and level of services. A management fee of 5.0% has been
Page 134
utilized in this analysis. The following table presents the subject’s historical performance, comparable
expense data and correlation of this expense category:
Amount
% of Rev
Management Fee Expense
Budget
Stabilized Year
1
2
3
$0 $165,814
$0
$44,260
0.0%
5.0%
0.0%
2.8%
VIG
4
Correlated
$86,775 $177,276
5.0%
5.0%
Expense Comparable 2 includes this fee in the General/Administrative category. The subject’s budget
does not include management fee expenses. According to Management, the contract amount is the
greater of 5.0% of revenue or $5,000 per month. The correlated estimate is based on a market rate of
5.0% and is in line with the comparable expense data.
Reserves
Reserves for replacement are not included in the subject’s historical operating statements. This
reserve is for the replacement of short-lived items, general modernization and renovation. Reserves
are estimated at $400 per unit, or $32,000, which is allocated at $200 for realty and $200 for major
moveable equipment.
Total Expenses
The historical expenses are compared to the estimated expenses in the following table:
Subject Total Expense Analysis
Total Expenses
Less: Property Taxes
Management Fee
Reserves
Adjusted Expenses
PUM
% of Rev
Avg Monthly Census
Management's Budget
Stabilized Year
$2,048,193
23,309
0
0
$2,024,884
$2,138
52.3%
78.9
Correlated
$2,345,932
135,000
177,276
32,000
$2,001,656
$2,279
56.5%
73.2
The following table compares the comparable expense data to the subject:
Page 135
Total Expenses
Less: Property Taxes
Management Fee
Reserves
Adjusted Expenses
PUM
% of Rev
Expense
Comparable
1
$1,694,269
48,110
165,814
0
$1,480,344
$1,860
44.4%
Comparable Expense Analysis
Expense
Expense
Comparable
Comparable
2
3
$1,201,424
$1,013,020
0
52,191
0
44,260
0
0
$1,201,424
$916,570
$2,002
$1,969
59.5%
57.3%
Expense
Comparable
4
$944,466
30,901
86,775
0
$826,790
$2,612
47.6%
Correlated
$2,345,932
135,000
177,276
32,000
$2,001,656
$2,279
56.5%
The comparable data ranges from $1,860 to $2,612 per unit month and from 44.4% to 59.5% of net
revenue. The correlated expenses are within the comparable range.
NET OPERATING INCOME (NOI)
In this analysis, the net operating income has been considered before deducting depreciation and
interest because these items are accounted for in the capitalization rate. Depreciation is a provision for
the recapture of historical costs and is a non-cash item. The debt-service component is excluded
because the charge for debt is a component of the capitalization rate.
The following table compares the subject’s correlated and projected NOI:
Subject Net Operating Income Analysis
Add: Property Taxes
Management Fee
Reserves
Adjusted NOI
PUM
% of Rev
Avg Monthly Census
Management's Budget
Stabilized Year
$1,825,460
23,309
0
0
$1,848,769
$1,952
47.7%
78.9
Correlated
$1,199,591
135,000
177,276
32,000
$1,543,867
$1,758
43.5%
73.2
Page 136
The subject’s NOI is also compared to the comparable data in the following table:
Add: Property Taxes
Management Fee
Reserves
Adjusted NOI
PUM
% of Rev
Comparable Net Operating Income Analysis
Expense
Expense
Expense
Comparable
Comparable
Comparable
1
2
3
$1,639,496
$818,562
$585,326
48,110
0
52,191
165,814
0
44,260
0
0
0
$1,853,421
$818,562
$681,777
$2,328
$1,364
$1,464
55.6%
40.5%
42.7%
Expense
Comparable
4
$791,024
30,901
86,775
0
$908,700
$2,870
52.4%
Correlated
$1,199,591
135,000
177,276
32,000
$1,543,867
$1,758
43.5%
The comparable data ranges from $1,364 to $2,870 per unit month and from 40.5% to 55.6% of net
revenue. The correlated NOI is within the comparable range.
Table 3, displayed on the following page, presents the subject’s stabilized pro forma:
Page 137
Table 3 - Stabilized Pro Forma
AL Studio (Small)
AL Studio (Large)
AL One-Bedroom
AL Two-Bedroom
Total
Occupancy Rate
Revenue:
AL Studio (Small)
AL Studio (Large)
AL One-Bedroom
AL Two-Bedroom
Total R&B
AL Levels of Care
Second Occupants
Community Fee
Miscellaneous
Total Revenue
Expenses:
Marketing
Plant Operations
Utilities
Dietary
Personal Care
Insurance
Subtotal
Property Taxes
Management Fee
Reserves
Total Expenses
Resident Months
177
199
221
66
108
108
878
960
91.5%
Amount
526,534
634,662
772,340
247,820
542,025
574,875
$3,298,257
149,328
30,660
27,750
39,528
$3,545,523
$219,600
114,192
184,464
140,544
158,112
307,440
21,960
724,680
74,664
56,000
$2,001,656
135,000
177,276
32,000
$2,345,932
$1,199,591
AMC
14.7
16.6
18.4
5.5
9.0
9.0
73.2
80.0
Payor
Mix
20.1%
22.6%
25.1%
7.5%
12.3%
12.3%
100.0%
PUM % of Rev.
$2,981
14.9%
3,194
17.9%
3,498
21.8%
3,741
7.0%
5,019
15.3%
5,323
16.2%
3,755
93.0%
170
4.2%
35
0.9%
32
0.8%
45
1.1%
$4,036
100.0%
$250
130
210
160
180
350
25
825
85
64
$2,279
154
202
36
$2,671
$1,366
6.2%
3.2%
5.2%
4.0%
4.5%
8.7%
0.6%
20.4%
2.1%
1.6%
56.5%
3.8%
5.0%
0.9%
66.2%
33.8%
Page 138
CAPITALIZATION PROCESS
After estimating cash flow from operations, it is necessary to process it into a value. This has been
accomplished via the Direct Capitalization Method. In this method, a capitalization rate is used to
convert the estimate of stabilized net operating income into a value. This rate should represent the
annual rate of return necessary to attract investment capital.
Inherent in the selected overall
capitalization rate is a return on, and of, invested capital.
Capitalization rates are derived from the market, and rates achieved by the sales used in the Sales
Comparison Approach are reviewed.
These sales, together with their capitalization rates, are
summarized as follows:
Sale
1
2
3
4
5
6
Number
of Beds
116
43
176
51
102
42
Date
of Sale
Aug-10
Apr-09
Apr-10
May-08
Dec-10
May-11
Sales
Price
$8,500,000
$4,750,000
$43,000,000
$6,200,000
$17,500,000
$4,375,000
OAR
9.5%
8.3%
8.0%
9.4%
9.3%
8.6%
While differences exist in terms of both the comparable sales and the local markets in which they
operate, the properties would compete with the subject for investors' dollars. The comparable data
indicates a capitalization rate range between 8.0% and 9.5%, with a median and mean of 8.9%.
Operationally, Comparable Sale 5 is the most similar to the subject and indicates a capitalization rate
of 9.3%.
Published surveys of investors in long-term care facilities have also been considered. The Senior Care
Acquisition Report, Sixteenth Edition, 2011, produced by Irving Levin and Associates, Inc., indicates
that the average assisted living capitalization rate for 2010 was 9.6%. The following chart illustrates
the average and median trend line:
Page 139
Average Capitalization Rates
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Median
Average
The National Investor Center (NIC) for the seniors and healthcare industries gathers quarterly
information on the sale of senior care facilities. The most recent quarterly (6/30/11) results are
summarized in the following table:
Property Type
Congregate
Assisted Living
Nursing Homes
CCRCs
Capitalization Rates
Low
Average
High
6.50%
8.10%
9.00%
7.00%
9.30%
12.00%
7.70%
13.00%
15.00%
7.00%
9.30%
13.50%
Number of
Properties
15
90
67
7
Capitalization rates reported in these published sources take into account reserves for replacement and
management fees.
In addition to deriving the capitalization rate from the transactions, the band of investment technique is
utilized. Properties are purchased with debt and equity and the overall capitalization rate (RO) must
Page 140
satisfy the market return requirements of both investment positions. The capitalization rate for debt is
the ratio of the annual debt service to the principal amount of the mortgage loan and is called the
mortgage constant (RM). The equity capitalization rate (RE) is the ratio of annual pre-tax cash flow to
the amount of the equity investment.
The overall capitalization rate is the weighted average of the mortgage’s constant and the equity
dividend rate based upon the loan-to-value ratio. The overall rate may be derived with the band of
investment using the following formula:
Mortgage component
Equity component
Overall Rate (RO)
M x (RM) =
E x (RR) = +
=
Where:
M = loan-to-value
E = equity ratio
(RM) = loan constant
(RE) = equity capitalization rate
The loan constant is estimated at 0.0676 (loan constant of 0.0619 plus MIP of 0.57%), based on the
proposed HUD loan terms of 5.5% interest, 40-year amortization, 0.57% mortgage insurance premium
(MIP), and 75% loan-to-value. The equity capitalization rate is at 15%.
Band of Investment
Percentage
Position
Contribution
Rates
Debt Portion
75%
x
0.0775
Equity Portion
25%
x
0.1500
Total Contribution (Rd)
100%
=
=
Weighted
Average
5.81%
3.75%
9.60%
The three methods considered indicate a range in capitalization rates, which are summarized in the
following table:
Page 141
Method
Comparable Sales
Published Survey
Band of Investment
Indication
8.0% to 9.5%
7.0% to 12.0%
9.60%
Upon completion, the subject property will be the only significant assisted living and memory care
assisted living facility in the PMA and Cheatham County. There are currently no comparable assisted
living or memory care assisted living beds within the subject’s PMA. Thus, the subject facility is
entering an unproven market for assisted living services. Although the subject property will be the
newest and most modern facility in the greater Nashville area, there is competition from facilities
within either southwestern or southern Nashville, in suburban, more densely developed neighborhoods
than the subject’s area. These factors increase the risk involved with achieving the projected NOI.
Based upon the reasonableness of the correlated NOI in comparison to market expectations, the
increased risk as described above, and the demand for assisted living units in the subject market area, a
capitalization rate of 9.5% is appropriate for the subject property. Applying the capitalization rate to
the adjusted net operating income results in the following computation of value:
Capitalization Rate
Indicated Value
Rounded
$1,199,591
9.5%
$12,627,270
$12,630,000
INCOME CAPITALIZATION APPROACH SUMMARY
It is our opinion that the value of the subject facility, in fee simple, via the Income Capitalization
Approach, is represented in the rounded amount of:
$12,630,000
OPERATING DEFICIT
In accordance with HUD Lean guidelines, the following calculation estimates the breakeven
occupancy and resulting operating deficit for the proposed subject facility:
Page 142
Prepared:
10/18/2011
Number of
Preleases
11.00
8.00
0.00
0.00
19.00
Avg. Monthly
Absorption
1.75
1.00
0.00
0.00
2.75
Occupancy Assumptions
Unit Type
e.g. Assisted Living
e.g. Memory Care
e.g. Skilled Nursing or Sub-Acute
e.g. Independent Living
Totals
Total # Beds
60
20
0
0
80
UW
Occupancy
92.00%
90.00%
0.00%
0.00%
91.50%
Rounded Operating Deficit Total:
Period
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Month 13
Month 14
Month 15
Month 16
Month 17
Month 18
Month 19
Month 20
Month 21
Month 22
Month 23
Month 24
Month 25
Month 26
Month 27
Month 28
Month 29
Month 30
Month 31
Month 32
Month 33
Month 34
Month 35
Month 36
Occupied
Units
0.00
0.00
19.00
21.75
24.50
27.25
30.00
32.75
35.50
38.25
41.00
43.75
46.50
48.25
50.00
51.75
53.50
55.25
57.00
58.75
60.50
62.25
64.00
65.75
67.50
69.25
71.00
72.75
73.20
73.20
73.20
73.20
73.20
73.20
73.20
73.20
Occupied
Percent
0.00%
0.00%
23.75%
27.19%
30.63%
34.06%
37.50%
40.94%
44.38%
47.81%
51.25%
54.69%
58.13%
60.31%
62.50%
64.69%
66.88%
69.06%
71.25%
73.44%
75.63%
77.81%
80.00%
82.19%
84.38%
86.56%
88.75%
90.94%
91.50%
91.50%
91.50%
91.50%
91.50%
91.50%
91.50%
91.50%
Income
per Period
$0
$0
$76,691
$87,790
$98,890
$109,990
$121,090
$132,190
$143,290
$154,390
$165,490
$176,590
$187,690
$194,754
$201,817
$208,881
$215,944
$223,008
$230,072
$237,135
$244,199
$251,262
$258,326
$265,390
$272,453
$279,517
$286,580
$293,644
$295,460
$295,460
$295,460
$295,460
$295,460
$295,460
$295,460
$295,460
Exp. & Mort.
per Period
($102,736)
($102,736)
($207,922)
($205,695)
($167,569)
($172,619)
($177,726)
($182,832)
($187,938)
($193,044)
($198,151)
($203,257)
($208,363)
($211,612)
($214,862)
($218,111)
($221,361)
($224,610)
($227,860)
($221,593)
($224,842)
($228,092)
($231,341)
($234,591)
($237,840)
($241,090)
($244,339)
($247,588)
($248,424)
($248,424)
($248,424)
($248,424)
($248,424)
($248,424)
($248,424)
($248,424)
$903,000
Income/Loss
per Period
($102,736)
($102,736)
($131,232)
($117,905)
($68,678)
($62,629)
($56,635)
($50,642)
($44,648)
($38,654)
($32,660)
($26,667)
($20,673)
($16,859)
($13,045)
($9,231)
($5,416)
($1,602)
$2,212
$15,542
$19,356
$23,170
$26,985
$30,799
$34,613
$38,427
$42,241
$46,055
$47,036
$47,036
$47,036
$47,036
$47,036
$47,036
$47,036
$47,036
Page 143
The above calculation assumes 11.0 assisted living units and 8.0 memory care units are pre-leased and
a net absorption rate of 1.75 assisted living units and 1.0 memory care units per month.
The
management fee used in the calculations is based on the actual contract, which stipulates a monthly
payment that is the greater of 5% of monthly revenues or $5,000.
CORRELATION OF VALUE
Three traditional approaches to value have been considered. While the approaches are independently
developed, the same fundamental principles of valuation and economics form the logical basis for each
approach. The indications of value by the three approaches are as follows:
Cost Approach
Sales Comparison Approach
Income Capitalization Approach
Fee Simple
$12,900,000
$12,650,000
$12,630,000
The Cost Approach is indicative of the value of the land plus the depreciated replacement cost of the
building, land improvements and equipment. The reliability of this approach depends on the property
age and whether or not it has obsolescence. In light of the complexity of estimating the replacement
cost, it is not necessarily the most reliable of value estimates, but still provides good support to the
value conclusion and is within a reasonable range. In comparison to the other two approaches, its
applicability is considered less relevant than both the Sales Comparison and Income Capitalization
approaches.
The Sales Comparison Approach reflects competitive conditions based on the value of the assets,
business enterprise and other intangible assets associated with the operation of a senior home-type
facility. In the case of special purpose properties such as the subject, this approach is particularly
difficult to apply due to the subjectivity involved in making adjustments for intangible assets and
numerous economic considerations that are not always known. Due to the lack of sales in the
subject’s state of Tennessee, the comparable sales used in this analysis are located in Tennessee, North
Carolina, Massachusetts and Ohio. The Sales Comparison Approach in this appraisal is considered
less relevant than the Income Capitalization Approach.
Page 144
The estimated net operating income for the subject is based on market data based on our surveys. The
financial data from comparable facilities has been relied upon, as well as our experience in appraising
facilities of this kind. The estimate of income and expenses is considered reliable and a reasonable
measure of market levels. The capitalization rate was derived from the marketplace based upon the
sales of similar facilities and a review of other current market data. Overall, the Income Capitalization
Approach, utilizing the direct capitalization method, was considered the best indicator of value for the
fee simple interest in the subject property.
Therefore, it is our opinion that the as-is market value of the fee simple interest in the going concern
identified as VantagePointe Village at Ashland City, as of September 7, 2011, is represented in the
rounded amount of:
$12,630,000
The value may be allocated as follows:
Land
Improvements
Equipment
Business
Total
$380,000
11,650,000
600,000
0
$12,630,000
Exhibit
A
AREA MAP
0 mi
10
20
Copyright © 1988-2005 Microsoft Corp. and/or its suppliers. All rights reserved. http://www.microsoft.com/streets/
© 2004 NAVTEQ. All rights reserved. This data includes information taken with permission from Canadian authorities © Her Majesty the Queen in Right of Canada. © Copyright 2004 by
TeleAtlas North America, Inc. All rights reserved.
30
NEIGHBORHOOD MAP
0 mi
0.2
0.4
0.6
0.8
1
1.2
Senior Life 2011
Place (see appendix for geographies), Total
Totals
Population
2016 Projection
2011 Estimate
2000 Census
1990 Census
5,330
4,931
3,641
3,105
Growth 1990 - 2000
17.26%
2000
Census
Population by Age
%
2011
Estimate
%
2016
Projection
%
Total Population
Age 45 - 54
Age 55 - 64
Age 65 - 74
Age 75 - 84
Age 85 and over
3,641
450
258
234
158
86
12.36%
7.09%
6.43%
4.34%
2.36%
4,931
710
553
308
221
128
14.40%
11.21%
6.25%
4.48%
2.60%
5,330
764
657
421
240
135
14.33%
12.33%
7.90%
4.50%
2.53%
Age 65 and over
478
13.13%
657
13.32%
796
14.93%
1,782
235
124
97
61
21
13.19%
6.96%
5.44%
3.42%
1.18%
2,417
337
279
136
88
40
13.94%
11.54%
5.63%
3.64%
1.65%
2,608
365
311
202
93
42
14.00%
11.92%
7.75%
3.57%
1.61%
179
10.04%
264
10.92%
337
12.92%
1,859
215
134
137
97
65
11.57%
7.21%
7.37%
5.22%
3.50%
2,514
373
274
172
133
88
14.84%
10.90%
6.84%
5.29%
3.50%
2,722
399
346
219
147
93
14.66%
12.71%
8.05%
5.40%
3.42%
299
16.08%
393
15.63%
459
16.86%
Total Population, Male
Age 45 - 54
Age 55 - 64
Age 65 - 74
Age 75 - 84
Age 85 and over
Age 65 and over
Total Population, Female
Age 45 - 54
Age 55 - 64
Age 65 - 74
Age 75 - 84
Age 85 and over
Age 65 and over
Prepared On: Tues Aug 30, 2011
Page
1
Of 9
Prepared By:
Project Code: 210212 / 210217
Nielsen Solution Center 1 800 866 6511
Prepared For:
© 2011 The Nielsen Company. All rights reserved.
Senior Life 2011
2000
Census
Population by Single Race Classification
White Alone
Age 65 and over
Black or African American Alone
Age 65 and over
American Indian and Alaska Native Alone
Age 65 and over
Asian Alone
Age 65 and over
Native Hawaiian and Other Pacific Islander Alone
Age 65 and over
Some Other Race Alone
Age 65 and over
Two or More Races
Age 65 and over
3,424
455
136
22
10
0
9
0
0
0
38
0
24
1
2000
Census
Population by Hispanic or Latino
Hispanic or Latino
Age 65 and over
Not Hispanic or Latino
74
2
3,567
2000
Census
Household Income by Age of Householder
Householder Age 45 - 54
Income less than $15,000
Income $15,000 - $24,999
Income $25,000 - $34,999
Income $35,000 - $49,999
Income $50,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
Income $200,000 or more
236
24
5
24
69
59
19
20
14
2
0
$49,130
Page
2
Of 9
%
13.29%
16.18%
0.00%
0.00%
0.00%
0.00%
4.17%
%
2.70%
%
10.17%
2.12%
10.17%
29.24%
25.00%
8.05%
8.47%
5.93%
0.85%
0.00%
2011
Estimate
4,497
615
268
38
15
0
24
0
0
0
75
1
52
3
%
13.68%
14.18%
0.00%
0.00%
0.00%
1.33%
5.77%
2011
Estimate
%
149
9
4,782
6.04%
2011
Estimate
396
42
17
40
85
106
49
21
17
15
4
$53,302
%
10.61%
4.29%
10.10%
21.46%
26.77%
12.37%
5.30%
4.29%
3.79%
1.01%
Prepared By:
Project Code: 210212 / 210217
Prepared For:
2016
Projection
4,786
736
335
58
14
0
32
1
0
0
99
0
64
1
2016
Projection
196
8
5,134
2016
Projection
422
41
18
42
89
115
54
22
18
17
6
$54,565
%
15.38%
17.31%
0.00%
3.12%
0.00%
0.00%
1.56%
%
4.08%
%
9.72%
4.27%
9.95%
21.09%
27.25%
12.80%
5.21%
4.27%
4.03%
1.42%
Senior Life 2011
2000
Census
Income $15,000 - $24,999
Income $25,000 - $34,999
Income $35,000 - $49,999
Income $50,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
201
24
51
17
29
71
9
0
0
0
0
$39,397
Income $15,000 - $24,999
Income $25,000 - $34,999
Income $35,000 - $49,999
Income $50,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
Income $15,000 - $24,999
Income $25,000 - $34,999
Income $35,000 - $49,999
Income $50,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
Page
3
Of 9
%
2011
Estimate
11.94%
25.37%
8.46%
14.43%
35.32%
4.48%
0.00%
0.00%
0.00%
0.00%
329
38
49
49
62
73
50
8
0
0
0
$41,895
163
67
5
28
44
19
0
0
0
0
0
$28,393
41.10%
3.07%
17.18%
26.99%
11.66%
0.00%
0.00%
0.00%
0.00%
0.00%
94
26
42
4
17
0
5
0
0
0
0
$20,000
27.66%
44.68%
4.26%
18.09%
0.00%
5.32%
0.00%
0.00%
0.00%
0.00%
%
2016
Projection
%
11.55%
14.89%
14.89%
18.84%
22.19%
15.20%
2.43%
0.00%
0.00%
0.00%
388
40
56
57
74
87
58
13
2
1
0
$43,311
10.31%
14.43%
14.69%
19.07%
22.42%
14.95%
3.35%
0.52%
0.26%
0.00%
197
68
20
40
43
20
5
0
0
0
1
$27,625
34.52%
10.15%
20.30%
21.83%
10.15%
2.54%
0.00%
0.00%
0.00%
0.51%
269
86
28
54
66
24
9
1
0
0
1
$28,796
31.97%
10.41%
20.07%
24.54%
8.92%
3.35%
0.37%
0.00%
0.00%
0.37%
133
27
41
31
10
16
5
3
0
0
0
$24,634
20.30%
30.83%
23.31%
7.52%
12.03%
3.76%
2.26%
0.00%
0.00%
0.00%
145
30
43
36
12
17
5
2
0
0
0
$24,884
20.69%
29.66%
24.83%
8.28%
11.72%
3.45%
1.38%
0.00%
0.00%
0.00%
Prepared By:
Project Code: 210212 / 210217
Prepared For:
Senior Life 2011
2000
Census
Householder Age 85 and over
Income $15,000 - $24,999
Income $25,000 - $34,999
Income $35,000 - $49,999
Income $50,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
%
28
10
12
1
4
0
1
0
0
0
0
$18,333
2000
Census
Households by Household Income
Total Household Income
Income Less than $15,000
Income $15,000 - $24,999
Income $25,000 - $34,999
Income $35,000 - $49,999
Income $50,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $100,000 - $149,999
Income $125,000 - $149,999
Income $150,000 - $199,999
Income $150,000 - $249,999
Income $200,000 - $499,999
Income $250,000 - $499,999
35.71%
42.86%
3.57%
14.29%
0.00%
3.57%
0.00%
0.00%
0.00%
0.00%
%
1,407
199
213
288
272
294
74
14.14%
15.14%
20.47%
19.33%
20.90%
5.26%
54
3.84%
9
0.64%
4
0
0.28%
0.00%
2011
Estimate
%
59
15
15
14
5
7
2
1
0
0
0
$24,667
25.42%
25.42%
23.73%
8.47%
11.86%
3.39%
1.69%
0.00%
0.00%
0.00%
2011
Estimate
%
2016
Projection
63
14
17
16
5
9
0
2
0
0
0
$25,313
2016
Projection
2,086
263
238
351
438
461
193
75
12.61%
11.41%
16.83%
21.00%
22.10%
9.25%
3.60%
26
15
1.36%
0.78%
30
19
1.44%
0.91%
14
0.73%
16
0.77%
2
0.10%
2
0.10%
$48,250
$49,113
$35,193
$40,920
$41,541
Per Capita Income
$16,892
$18,871
$19,332
4
Of 9
%
12.86%
11.71%
17.30%
20.60%
22.27%
8.99%
3.29%
$43,421
Page
22.22%
26.98%
25.40%
7.94%
14.29%
0.00%
3.17%
0.00%
0.00%
0.00%
1,913
246
224
331
394
426
172
63
Average Household Income
%
Prepared By:
Project Code: 210212 / 210217
Prepared For:
Senior Life 2011
2000
Census
All Owner-Occupied Housing Unit Values
Total All Owner-Occupied Housing Unit Values
Value Less than $20,000
Value $20,000 - $39,999
Value $40,000 - $59,999
Value $60,000 - $79,999
Value $80,000 - $99,999
Value $100,000 - $149,999
Value $150,000 - $199,999
Value $200,000 - $299,999
Value $300,000 - $399,999
Value $400,000 - $499,999
Value $500,000 - $749,999
Value $750,000 - $999,999
Value $1,000,000 or more
860
29
25
97
180
257
223
9
13
7
0
0
0
0
Median All Owner-Occupied Housing Unit Value
%
3.37%
2.91%
11.28%
20.93%
29.88%
25.93%
1.05%
1.51%
0.81%
0.00%
0.00%
0.00%
0.00%
$86,926
2000
Census
Group Quarters by Population Type*
Group Quarters Population
Correctional Institutions
Nursing Homes
Other Institutions
College Dormitories
Military Quarters
Other Noninstitutional Quarters
184
104
80
0
0
0
0
Owner Occupied
Renter Occupied
%
56.52%
43.48%
0.00%
0.00%
0.00%
0.00%
860
556
Page
5
Of 9
1,118
29
38
40
82
168
437
201
77
25
8
13
0
0
%
2.59%
3.40%
3.58%
7.33%
15.03%
39.09%
17.98%
6.89%
2.24%
0.72%
1.16%
0.00%
0.00%
$123,112
2000
Census
Tenure of Occupied Housing Units
2011
Estimate
1,220
23
38
38
71
113
463
275
144
22
14
15
4
0
%
1.89%
3.11%
3.11%
5.82%
9.26%
37.95%
22.54%
11.80%
1.80%
1.15%
1.23%
0.33%
0.00%
$135,313
2011
Estimate
193
107
82
0
0
0
4
2016
Projection
%
55.44%
42.49%
0.00%
0.00%
0.00%
2.07%
2011
Estimate
1,118
795
Prepared By:
Project Code: 210212 / 210217
Prepared For:
2016
Projection
194
108
82
0
0
0
4
2016
Projection
1,220
866
%
55.67%
42.27%
0.00%
0.00%
0.00%
2.06%
Senior Life 2011
Totals
2000 Tenure By Age of Householder
Total Households
Owner Occupied
Householder 55 to 59 Years
Householder 85 and over
1,408
840
58
102
100
65
18
6.90%
12.14%
11.90%
7.74%
2.14%
Renter Occupied
568
23
30
49
17
18
4.05%
5.28%
8.63%
2.99%
3.17%
2000 Pop 65 and over by HH Type and Relationship
Totals
Total for Pop 65 and over
In Households:
In Family Households:
Householder
Male
Female
Spouse
Parent
Other Relatives
Nonrelatives
In Non-Family Households:
Male householder
Living Alone
Not Living Alone
Female Householder
Living Alone
Not Living Alone
Nonrelatives
In Group Quarters:
Institutionalized population
Noninstitutionalized population
Page
6
Of 9
460
412
220
108
99
9
85
14
4
9
192
60
17
43
117
117
0
15
47.83%
23.48%
21.52%
1.96%
18.48%
3.04%
0.87%
1.96%
41.74%
13.04%
3.70%
9.35%
25.43%
25.43%
0.00%
3.26%
48
48
0
10.43%
0.00%
Prepared By:
Project Code: 210212 / 210217
Prepared For:
Senior Life 2011
2000 Mobility and Disability Civilian
Noninstitutionalized Persons Age 16 and over
Totals
Total Disability
Sensory Disability
Physical Disability
Mental Disability
1,121
157
395
193
81
295
Totals
Disability by Sex by Age
Male
With a Disability
No Disability
Female
With a Disability
No Disability
2,595
1,243
359
884
1,352
417
935
2000 Occupied Housing Units
Totals
Total Units
With Telephone
No Telephone
1,408
1,373
35
2000 Census Poverty Status in 1999 Families
By Household Type by Age of Householder
Totals
Population with Known Poverty Status
Married-Couple Families
In other Families
Male householder, no wife present
Female householder, no husband present
Unrelated individuals
Income At or Above Poverty Level
In other Families
Income Below Poverty Level
In other Families
3,388
2,161
650
123
527
577
3,071
2,082
522
61
461
467
317
79
128
Page
7
Of 9
%
14.01%
35.24%
17.22%
7.23%
26.32%
%
47.90%
13.83%
34.07%
52.10%
16.07%
36.03%
%
97.51%
2.49%
%
63.78%
19.19%
3.63%
15.55%
17.03%
90.64%
61.45%
15.41%
1.80%
13.61%
13.78%
9.36%
2.33%
3.78%
65 Yrs
And Over
528
89
186
74
47
132
%
16.86%
35.23%
14.02%
8.90%
25.00%
65 - 74
Yrs
243
111
52
59
132
83
49
%
45.68%
21.40%
24.28%
54.32%
34.16%
20.16%
65 - 74
Yrs
%
149
149 100.00%
0
0.00%
65 - 74
Yrs
243
135
6
0
6
102
233
135
6
0
6
92
10
0
0
%
55.56%
2.47%
0.00%
2.47%
41.98%
95.88%
55.56%
2.47%
0.00%
2.47%
37.86%
4.12%
0.00%
0.00%
Prepared By:
Project Code: 210212 / 210217
Prepared For:
75 Yrs
And Over
169
61
37
24
108
87
21
75 Yrs
And Over
118
113
5
75 Yrs
And Over
169
62
17
9
8
90
127
62
8
0
8
57
42
0
9
%
36.09%
21.89%
14.20%
63.91%
51.48%
12.43%
%
95.76%
4.24%
%
36.69%
10.06%
5.33%
4.73%
53.25%
75.15%
36.69%
4.73%
0.00%
4.73%
33.73%
24.85%
0.00%
5.33%
Senior Life 2011
Totals
62
66
110
%
1.83%
1.95%
3.25%
65 - 74
Yrs
0
0
10
%
0.00%
0.00%
4.12%
75 Yrs
And Over
9
0
33
%
5.33%
0.00%
19.53%
Some median values are assigned pre-determined amounts rather than calculated amounts. Med HH Inc by Age values more than
$200,000 are displayed as $200,001. Med HH Inc values less than $15,000 are displayed as $14,999. Med HH Inc values more than
$500,000 are displayed as $500,001. Med Housing Values more than $1,000,000 are displayed as $1,000,001.
Page
8
Of 9
Prepared By:
Project Code: 210212 / 210217
Prepared For:
Senior Life 2011
Appendix: Area Listing
Area Name:
Type: List - Place
Reporting Detail: Aggregate
Geography Code
Geography Name
4702180
Ashland City town
Reporting Level: Place
Geography Code
Geography Name
Project Information:
Site:
4
Order Number: 970290023
Page
9
Of 9
Prepared By:
Project Code: 210212 / 210217
Prepared For:
Senior Life 2011
County (see appendix for geographies), Total
Totals
Population
2016 Projection
2011 Estimate
2000 Census
1990 Census
42,216
40,455
35,912
27,140
Growth 1990 - 2000
32.32%
2000
Census
Population by Age
%
2011
Estimate
%
2016
Projection
%
Total Population
Age 45 - 54
Age 55 - 64
Age 65 - 74
Age 75 - 84
Age 85 and over
35,912
5,175
3,071
1,840
892
353
14.41%
8.55%
5.12%
2.48%
0.98%
40,455
6,884
5,089
2,768
1,381
502
17.02%
12.58%
6.84%
3.41%
1.24%
42,216
6,728
5,984
3,659
1,626
612
15.94%
14.17%
8.67%
3.85%
1.45%
Age 65 and over
3,085
8.59%
4,651
11.50%
5,897
13.97%
17,981
2,642
1,559
878
361
88
14.69%
8.67%
4.88%
2.01%
0.49%
20,114
3,398
2,552
1,359
594
175
16.89%
12.69%
6.76%
2.95%
0.87%
20,923
3,254
2,930
1,800
708
216
15.55%
14.00%
8.60%
3.38%
1.03%
Age 65 and over
1,327
7.38%
2,128
10.58%
2,724
13.02%
Total Population, Female
Age 45 - 54
Age 55 - 64
Age 65 - 74
Age 75 - 84
Age 85 and over
17,931
2,533
1,512
962
531
265
14.13%
8.43%
5.37%
2.96%
1.48%
20,341
3,486
2,537
1,409
787
327
17.14%
12.47%
6.93%
3.87%
1.61%
21,293
3,474
3,054
1,859
918
396
16.32%
14.34%
8.73%
4.31%
1.86%
Age 65 and over
1,758
9.80%
2,523
12.40%
3,173
14.90%
Total Population, Male
Age 45 - 54
Age 55 - 64
Age 65 - 74
Age 75 - 84
Age 85 and over
Page
1
Of 9
Prepared By:
Project Code: 210212 / 210217
Prepared For:
Senior Life 2011
2000
Census
Population by Single Race Classification
White Alone
Age 65 and over
Black or African American Alone
Age 65 and over
American Indian and Alaska Native Alone
Age 65 and over
Asian Alone
Age 65 and over
Native Hawaiian and Other Pacific Islander Alone
Age 65 and over
Some Other Race Alone
Age 65 and over
Two or More Races
Age 65 and over
34,783
2,980
532
83
135
4
63
4
17
0
130
0
252
14
2000
Census
Population by Hispanic or Latino
Hispanic or Latino
Age 65 and over
Not Hispanic or Latino
437
15
35,475
2000
Census
Income $15,000 - $24,999
Income $25,000 - $34,999
Income $35,000 - $49,999
Income $50,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
2,797
211
194
288
571
811
361
189
72
65
35
$54,146
Page
2
Of 9
%
8.57%
15.60%
2.96%
6.35%
0.00%
0.00%
5.56%
%
3.43%
%
7.54%
6.94%
10.30%
20.41%
29.00%
12.91%
6.76%
2.57%
2.32%
1.25%
2011
Estimate
38,288
4,401
1,117
219
161
6
178
8
22
0
269
0
420
17
%
11.49%
19.61%
3.73%
4.49%
0.00%
0.00%
4.05%
2011
Estimate
%
963
39
39,492
4.05%
2011
Estimate
3,640
222
185
296
547
1,037
651
332
174
109
87
$63,742
%
6.10%
5.08%
8.13%
15.03%
28.49%
17.88%
9.12%
4.78%
2.99%
2.39%
Prepared By:
Project Code: 210212 / 210217
Prepared For:
2016
Projection
39,542
5,520
1,405
321
174
11
234
16
23
0
337
0
501
29
2016
Projection
1,224
60
40,992
2016
Projection
3,509
194
166
262
507
989
648
348
183
117
95
$65,811
%
13.96%
22.85%
6.32%
6.84%
0.00%
0.00%
5.79%
%
4.90%
%
5.53%
4.73%
7.47%
14.45%
28.18%
18.47%
9.92%
5.22%
3.33%
2.71%
Senior Life 2011
2000
Census
Income $15,000 - $24,999
Income $25,000 - $34,999
Income $35,000 - $49,999
Income $50,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
1,802
180
196
253
360
474
181
73
40
30
15
$46,333
Income $15,000 - $24,999
Income $25,000 - $34,999
Income $35,000 - $49,999
Income $50,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
Income $15,000 - $24,999
Income $25,000 - $34,999
Income $35,000 - $49,999
Income $50,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
Page
3
Of 9
%
2011
Estimate
9.99%
10.88%
14.04%
19.98%
26.30%
10.04%
4.05%
2.22%
1.66%
0.83%
2,875
233
207
337
551
773
381
193
83
71
46
$53,541
1,140
304
125
184
267
213
15
19
2
0
11
$32,663
26.67%
10.96%
16.14%
23.42%
18.68%
1.32%
1.67%
0.18%
0.00%
0.96%
603
167
184
103
82
42
14
7
0
0
4
$22,310
27.69%
30.51%
17.08%
13.60%
6.97%
2.32%
1.16%
0.00%
0.00%
0.66%
%
2016
Projection
%
8.10%
7.20%
11.72%
19.17%
26.89%
13.25%
6.71%
2.89%
2.47%
1.60%
3,330
245
218
372
611
901
475
247
109
92
60
$56,077
7.36%
6.55%
11.17%
18.35%
27.06%
14.26%
7.42%
3.27%
2.76%
1.80%
1,622
320
205
200
372
364
101
20
19
4
17
$38,468
19.73%
12.64%
12.33%
22.93%
22.44%
6.23%
1.23%
1.17%
0.25%
1.05%
2,111
382
255
251
481
495
154
34
27
8
24
$40,223
18.10%
12.08%
11.89%
22.79%
23.45%
7.30%
1.61%
1.28%
0.38%
1.14%
854
191
216
165
147
85
24
14
7
1
4
$26,212
22.37%
25.29%
19.32%
17.21%
9.95%
2.81%
1.64%
0.82%
0.12%
0.47%
996
214
234
196
172
111
33
18
10
2
6
$27,551
21.49%
23.49%
19.68%
17.27%
11.14%
3.31%
1.81%
1.00%
0.20%
0.60%
Prepared By:
Project Code: 210212 / 210217
Prepared For:
Senior Life 2011
2000
Census
Householder Age 85 and over
Income $15,000 - $24,999
Income $25,000 - $34,999
Income $35,000 - $49,999
Income $50,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $125,000 - $149,999
Income $150,000 - $199,999
%
167
60
53
23
18
9
3
1
0
0
0
$19,434
2000
Census
Households by Household Income
Total Household Income
Income Less than $15,000
Income $15,000 - $24,999
Income $25,000 - $34,999
Income $35,000 - $49,999
Income $50,000 - $74,999
Income $75,000 - $99,999
Income $100,000 - $124,999
Income $100,000 - $149,999
Income $125,000 - $149,999
Income $150,000 - $199,999
Income $150,000 - $249,999
Income $200,000 - $499,999
Income $250,000 - $499,999
35.93%
31.74%
13.77%
10.78%
5.39%
1.80%
0.60%
0.00%
0.00%
0.00%
%
12,869
1,428
1,290
1,888
2,533
3,448
1,295
11.10%
10.02%
14.67%
19.68%
26.79%
10.06%
716
5.56%
221
1.72%
42
8
0.33%
0.06%
2011
Estimate
246
76
64
43
30
22
6
3
2
0
0
$22,344
%
30.89%
26.02%
17.48%
12.20%
8.94%
2.44%
1.22%
0.81%
0.00%
0.00%
2011
Estimate
%
2016
Projection
307
88
78
55
42
28
7
5
4
0
0
$23,397
2016
Projection
15,420
1,444
1,259
1,717
2,746
4,096
2,088
1,039
9.36%
8.16%
11.13%
17.81%
26.56%
13.54%
6.74%
413
274
2.80%
1.86%
470
311
3.05%
2.02%
195
1.32%
221
1.43%
26
0.18%
29
0.19%
$60,905
$62,187
$45,828
$52,422
$53,320
Per Capita Income
$18,882
$22,295
$22,830
4
Of 9
%
9.54%
8.34%
11.51%
18.00%
26.87%
13.16%
6.40%
$52,339
Page
28.66%
25.41%
17.92%
13.68%
9.12%
2.28%
1.63%
1.30%
0.00%
0.00%
14,729
1,405
1,229
1,696
2,651
3,958
1,939
943
Average Household Income
%
Prepared By:
Project Code: 210212 / 210217
Prepared For:
Senior Life 2011
2000
Census
All Owner-Occupied Housing Unit Values
Total All Owner-Occupied Housing Unit Values
Value Less than $20,000
Value $20,000 - $39,999
Value $40,000 - $59,999
Value $60,000 - $79,999
Value $80,000 - $99,999
Value $100,000 - $149,999
Value $150,000 - $199,999
Value $200,000 - $299,999
Value $300,000 - $399,999
Value $400,000 - $499,999
Value $500,000 - $749,999
Value $750,000 - $999,999
Value $1,000,000 or more
10,773
227
511
611
1,405
2,287
3,080
1,581
800
129
43
60
19
13
Median All Owner-Occupied Housing Unit Value
%
2.11%
4.74%
5.67%
13.04%
21.23%
28.59%
14.68%
7.43%
1.20%
0.40%
0.56%
0.18%
0.12%
$105,552
2000
Census
Group Quarters by Population Type*
Group Quarters Population
Correctional Institutions
Nursing Homes
Other Institutions
College Dormitories
Military Quarters
Other Noninstitutional Quarters
401
104
241
28
0
0
28
Owner Occupied
Renter Occupied
%
25.94%
60.10%
6.98%
0.00%
0.00%
6.98%
10,773
2,105
Page
5
Of 9
11,774
177
204
441
394
850
3,573
2,366
2,651
705
181
144
51
37
%
1.50%
1.73%
3.75%
3.35%
7.22%
30.35%
20.10%
22.52%
5.99%
1.54%
1.22%
0.43%
0.31%
$155,241
2000
Census
Tenure of Occupied Housing Units
2011
Estimate
12,318
167
176
377
379
609
3,111
2,768
3,083
968
358
199
75
48
%
1.36%
1.43%
3.06%
3.08%
4.94%
25.26%
22.47%
25.03%
7.86%
2.91%
1.62%
0.61%
0.39%
$174,205
2011
Estimate
406
118
236
25
0
0
27
2016
Projection
%
29.06%
58.13%
6.16%
0.00%
0.00%
6.65%
2011
Estimate
11,774
2,955
Prepared By:
Project Code: 210212 / 210217
Prepared For:
2016
Projection
408
119
237
25
0
0
27
2016
Projection
12,318
3,102
%
29.17%
58.09%
6.13%
0.00%
0.00%
6.62%
Senior Life 2011
Totals
2000 Tenure By Age of Householder
Total Households
Owner Occupied
12,878
10,766
920
726
967
633
178
8.55%
6.74%
8.98%
5.88%
1.65%
Renter Occupied
2,112
98
52
100
58
22
4.64%
2.46%
4.73%
2.75%
1.04%
2000 Pop 65 and over by HH Type and Relationship
Totals
Total for Pop 65 and over
In Households:
In Family Households:
Householder
Male
Female
Spouse
Parent
Other Relatives
Nonrelatives
In Non-Family Households:
Male householder
Living Alone
Not Living Alone
Female Householder
Living Alone
Not Living Alone
Nonrelatives
In Group Quarters:
Institutionalized population
Noninstitutionalized population
Page
6
Of 9
3,059
2,848
2,100
1,179
915
264
640
127
134
20
748
206
155
51
525
525
0
17
68.65%
38.54%
29.91%
8.63%
20.92%
4.15%
4.38%
0.65%
24.45%
6.73%
5.07%
1.67%
17.16%
17.16%
0.00%
0.56%
211
198
13
6.47%
0.42%
Prepared By:
Project Code: 210212 / 210217
Prepared For:
Senior Life 2011
Totals
Total Disability
Sensory Disability
Physical Disability
Mental Disability
8,601
1,114
2,692
1,672
751
2,372
Totals
Disability by Sex by Age
Male
With a Disability
No Disability
Female
With a Disability
No Disability
26,583
13,046
3,442
9,604
13,537
3,095
10,442
2000 Occupied Housing Units
Totals
Total Units
With Telephone
No Telephone
12,878
12,605
273
Totals
Population with Known Poverty Status
In other Families
Income At or Above Poverty Level
In other Families
Income Below Poverty Level
In other Families
35,399
26,853
5,358
1,833
3,525
3,188
32,764
25,589
4,628
1,591
3,037
2,547
2,635
1,264
730
Page
7
Of 9
%
12.95%
31.30%
19.44%
8.73%
27.58%
%
49.08%
12.95%
36.13%
50.92%
11.64%
39.28%
%
97.88%
2.12%
%
75.86%
15.14%
5.18%
9.96%
9.01%
92.56%
72.29%
13.07%
4.49%
8.58%
7.20%
7.44%
3.57%
2.06%
65 Yrs
And Over
2,998
476
1,005
536
330
651
%
15.88%
33.52%
17.88%
11.01%
21.71%
65 - 74
Yrs
1,772
875
362
513
897
364
533
%
49.38%
20.43%
28.95%
50.62%
20.54%
30.08%
65 - 74
Yrs
1,067
1,060
7
%
99.34%
0.66%
65 - 74
Yrs
1,772
1,239
173
33
140
360
1,626
1,179
171
33
138
276
146
60
2
%
69.92%
9.76%
1.86%
7.90%
20.32%
91.76%
66.53%
9.65%
1.86%
7.79%
15.58%
8.24%
3.39%
0.11%
Prepared By:
Project Code: 210212 / 210217
Prepared For:
75 Yrs
And Over
1,089
393
297
96
696
454
242
75 Yrs
And Over
891
886
5
75 Yrs
And Over
1,089
450
238
35
203
401
965
440
211
24
187
314
124
10
27
%
36.09%
27.27%
8.82%
63.91%
41.69%
22.22%
%
99.44%
0.56%
%
41.32%
21.85%
3.21%
18.64%
36.82%
88.61%
40.40%
19.38%
2.20%
17.17%
28.83%
11.39%
0.92%
2.48%
Senior Life 2011
Totals
242
488
641
%
0.68%
1.38%
1.81%
65 - 74
Yrs
0
2
84
%
0.00%
0.11%
4.74%
75 Yrs
And Over
11
16
87
%
1.01%
1.47%
7.99%
Some median values are assigned pre-determined amounts rather than calculated amounts. Med HH Inc by Age values more than
$200,000 are displayed as $200,001. Med HH Inc values less than $15,000 are displayed as $14,999. Med HH Inc values more than
$500,000 are displayed as $500,001. Med Housing Values more than $1,000,000 are displayed as $1,000,001.
Page
8
Of 9
Prepared By:
Project Code: 210212 / 210217
Prepared For:
Senior Life 2011
Appendix: Area Listing
Area Name:
Type: List - County
Reporting Detail: Aggregate
Geography Code
Geography Name
47021
Cheatham County, TN
Reporting Level: County
Geography Code
Geography Name
Project Information:
Site:
3
Order Number: 970290023
Page
9
Of 9
Prepared By:
Project Code: 210212 / 210217
Prepared For:
Exhibit
B
LAND SALES MAP
0 mi
2
4
6
8
10
COMPARABLE LAND SALE 1
General Data
Location
City
State
Assessor's Parcel
5110 Ashland City Highway
Nashville
TN
067-00-0-145.00
Site Data
Size (SF)
Size (Acres)
Zoning
Topography
Shape
Corner/Interior
127,631
2.93
CL
Moderately Sloping
Irregular
Interior
Transaction Data
Seller
Buyer
Interest
Recording
Date
Terms
Price
Price Per SF
Price Per Acre
Kantz William E. Jr.
Phillip E. Chamblee
Fee simple
20110503-0033764
April 28, 2011
All cash sale
$245,500
$1.92
$83,788
Additional Information
Although located in Davidson County, this located on the same roadway as the subject's parcel and is
positioned in a similar neighborhood. As such, this parcel has similar visibility and accessible
characteristics to the subject. In addition, land uses in this area predominantly consist of commercial land
uses and vacant land, which is similar to the subject's area.
General Data
Location
City
State
Assessor's Parcel
7960 Coley Davis Road
Nashville
TN
141-00-0-088.00
Site Data
Size (SF)
Size (Acres)
Zoning
Topography
Shape
Corner/Interior
251,777
5.78
SP
Level
Irregular
Interior
Transaction Data
Seller
Buyer
Interest
Recording
Date
Terms
Price
Price Per SF
Price Per Acre
Psalms 65 Unit 2 LLC
Coley Davis Partners LLC
Fee simple
2009000312221
July 7, 2009
All cash sale
$1,000,000
$3.97
$173,010
This sale is located in the southwestern section of Davidson County on a moderately traveled area
roadway. However, the site is located approximately 150 fee south of U.S. Interstate 40. The parcel is also
visible from the interstate. The parcel's immediate neighborhood is more residential than the subject's area.
The site has a "Specific Plan" zoning designation and was approved for the construction of 98 residential
townhomes to be known as Harpes Spring Village. However, the development of the community was been
delayed given the current housing market.
General Data
Location
City
State
Assessor's Parcel
2810 Tucker Road
Nashville
TN
070-02-0-001.00
Site Data
Size (SF)
Size (Acres)
Zoning
Topography
Shape
Corner/Interior
104,980
2.41
R10
Level
Irregular
Interior
Transaction Data
Seller
Buyer
Interest
Recording
Date
Terms
Price
Price Per SF
Price Per Acre
Mayberry Frances E. & Lessly
Centerstone of TN Inc.
Fee simple
20081030-0108408
October 30, 2008
All cash sale
$125,000
$1.19
$51,867
This parcel is located in a northwestern neighborhood of Nashville and is adjacent to a local athletic recreation
field. It is located on a lightly traveled local roadway and the immediately surrounding uses are either vacant
land or residentially supportive commercial uses. However, the area is part of a larger residential area. Land
uses in the parcel's immediate area appear to be in fair condition.
LAND SALES PHOTOGRAPHS
Improved Sale 1 – 5110 Ashland City Highway
Improved Sale 2 – 7960 Coley Davis Road
Improved Sale 3 – 2810 Tucker Road
Exhibit
C
IMPROVED SALES MAP
0 mi
200
400
600
800
COMPARABLE IMPROVED SALE 1
General Data
Facility
Location
City
State
Year Built
Units
Building Size SF
Land SF
The Terrace at Mountain Creek
1005 Mountain Creek
Chattanooga
TN
1985
116
109,463
538,402
Sales Data
Grantor
Grantee
Recording
Date
Price
Terms
Crete AL Properties, LLC
Tabitha Inc.
N/A
August 31, 2010
$8,500,000
N/A
Payor Mix and Occupancy
Payor/PrivatePay
Payor Medicaid
Payor Medicare
Total
Overall Occupancy
N/A
N/A
N/A
N/A
97.0%
Operating Data
Net Revenue PUM
Net Revenue EGI
Expenses
Operating Margin
NOI per SF
NOI per Unit
$2,597
$3,507,067
$2,698,649
$808,418
23.1%
$7.39
$6,969
Value Indicators
Capitalization Rate
EGIM
Price per SF
Price per Unit
9.5%
2.42
$77.65
$73,276
Demographics (Five Mile Radius)
Increasing
Total Population
$37,260
Median HH Income
Median Housing Value $126,500
The facility consists of 42 independent living units, 59 assisted living units and 15 memory care units. The building was
originally constructed in 1985 and underwent renovations in 2004. It is in good condition and located in a good market
area. The seller is a national owner/operator of senior housing that is selling the asset to free capital for other corporate
purposes. The buyer is a Florida-based real estate investment company who will keep the existing management in place.
Jeff Binder and Brad Clousing of Senior Living Brokerage, Inc facilitated the transaction.
General Data
Facility
Location
City
State
Year Built
Units
Building Size SF
Land SF
Spring Arbor of Hickory
2010 29th Avenue Dr. NE
Hickory
NC
1995
43
26,860
174,240
Sales Data
Grantor
Grantee
Recording
Date
Price
Terms
N/A
Smith Packett
N/A
April 30, 2009
$4,750,000
All cash to seller
Payor/PrivatePay
Payor Medicaid
Payor Medicare
Total
Overall Occupancy
62.0%
38.0%
0.0%
100.0%
91.6%
Operating Data
Net Revenue PRM
Net Revenue EGI
Expenses
Operating Margin
NOI per SF
NOI per Bed
$4,556
$2,153,212
$1,758,792
$394,420
18.3%
$14.68
$9,173
Value Indicators
Capitalization Rate
EGIM
Price per SF
Price per Bed
8.3%
2.21
$176.84
$110,465
Total Population
Increasing
Median HH Income
$42,014
There is a 13-unit dementia care unit that is part of the 43 units. The facility is licensed for 66 beds. The census was 62%
private pay and 38% Medicaid. This sale was verified with Mike Pardoll of Marcus & Millichap.
General Data
Facility
Location
City
State
Year Built
Units
Building Size SF
Land SF
Two MA ALFs
10 Devon Dr., 4 Forge Hill Rd.
Acton and Franklin
MA
1999/2000
176
144,122
239,580
Sales Data
Grantor
Grantee
Recording
Date
Price
Terms
Westport Capital Advisors
AEW Capital Management, L.P.
N/A
April 30, 2010
$43,000,000
Fannie or Freddie
Payor/PrivatePay
Payor Medicaid
Payor Medicare
Total
Overall Occupancy
100.0%
N/A
N/A
100.0%
97.0%
Operating Data
Net Revenue PRM
Net Revenue EGI
Expenses
Operating Margin
NOI per SF
NOI per Bed
$4,803
$9,840,000
$6,396,000
$3,444,000
35.0%
$23.90
$19,568
Value Indicators
Capitalization Rate
EGIM
Price per SF
Price per Bed
8.0%
4.37
$298.36
$244,318
Total Population
Increasing
Median HH Income
$117,452
This sale consists of two facilities, one in Acton and one in Franklin, Massachusetts. The Acton facility, The Inn at
Robbins Brook, is a 90-unit (25 of which are in a secured Alzheimer's section), three-story assisted living facility. The
Franklin facility, Forge Hill Senior Living, is a 103-unit facility made up of 20 independent living units, 19 Alzheimer's
units and 64 assisted living units. Both facilities are located in suburban communities west of Boston. Christopher
Hyldahl of Marcus & Millichap confirmed the sale (310-606-0888). These two properties were purchased by the seller as
part of a four-facility portfolio three years ago for an allocated purchase price of $34.5 million, or $178,700 per unit.
Reportedly, these facilities were not fully stabilized at the time of sale three years ago. The operating data is based on a
forecast of 3% growth at a stable 35% operating margin. One of the facilities has a restriction to keep 20 units under
market rents, which was tied to the old financing.
General Data
Facility
Location
City
State
Year Built
Units
Building Size SF
Land SF
The Manor at Autumn Hills
2567 Niles Vienna Rd.
Niles
OH
1998
51
40,483
355,014
Sales Data
Grantor
Grantee
Recording
Date
Price
Terms
Carl Gilette, et al.
CRG Investment Properties, LLC
N/A
May 27, 2008
$6,200,000
All cash to seller
Payor/PrivatePay
Payor Medicaid
Payor Medicare
Total
Overall Occupancy
100.0%
0.0%
0.0%
100.0%
N/A
Operating Data
Net Revenue PRM
Net Revenue EGI
Expenses
Operating Margin
NOI per SF
NOI per Bed
N/A
$1,722,222
$1,138,257
$583,965
33.9%
$14.42
$11,450
Value Indicators
Capitalization Rate
EGIM
Price per SF
Price per Bed
9.4%
3.60
$153.15
$121,569
Total Population
Decreasing
Median HH Income
$24,944
The facility operates 51 assisted living units (13 studio units, 36 one-bedroom units and two two-bedroom units). The
quality of construction and the condition of the improvements are good. The buyer was a local owner/operator of senior
housing and healthcare properties. Sales data was verified through a copy of the purchase agreement and public records.
General Data
Facility
Location
City
State
Year Built
Units
Building Size SF
Land SF
Carriage Court of Hilliard
3570 Heritage Club Dr.
Hilliard
OH
1998
102
69,184
196,456
Sales Data
Grantor
Grantee
Recording
Date
Price
Terms
Carriage Court Hilliard
Hilliard ALF, LLC
N/A
December 22, 2010
$17,500,000
Assumption of existing HUD loan
Payor/PrivatePay
Payor Medicaid
Payor Medicare
Total
Overall Occupancy
100.0%
0.0%
0.0%
100.0%
95.0%
Operating Data
Net Revenue PRM
Net Revenue EGI
Expenses
Operating Margin
NOI per SF
NOI per Bed
$3,964
$4,609,739
$2,985,863
$1,623,876
35.2%
$23.47
$15,920
Value Indicators
Capitalization Rate
EGIM
Price per SF
Price per Bed
9.3%
3.80
$252.95
$171,569
Total Population
Stable
Median HH Income
$35,848
This is a good quality facility in good condition located in Hilliard, a suburb of Columbus. The subject features 64 assisted
living and 38 memory care units. The 64 assisted living units are comprised of 60 studios and four one-bedroom units.
The 38 memory care units are comprised of 12 semiprivate units and 26 studios. Overall occupancy is typically over 90%
for both assisted living and memory care. The income and expense data includes a 5% management fee and replacements
for reserves at $400 per unit. The financial information is based on the trailing 12 months ending May 2010. The sales
data was verified with a representative of the buyer, Cornerstone Real Estate Fund.
General Data
Facility
Location
City
State
Year Built
Units
Building Size SF
Land SF
Residence of Chardon
501 Chardon Windsor Rd.
Chardon
OH
2000
42
28,432
246,985
Sales Data
Grantor
Grantee
Recording
Date
Price
Terms
DB Midwest IV LLC
Woodlands of Chardon, LLC
1902-1344
May 25, 2011
$4,375,000
Terms Not Disclosed
Payor/PrivatePay
Payor Medicaid
Payor Medicare
Total
Overall Occupancy
100.0%
0.0%
0.0%
100.0%
100.0%
Operating Data
Net Revenue PRM
Net Revenue EGI
Expenses
Operating Margin
NOI per SF
NOI per Bed
$3,326
$1,676,245
$1,299,337
$376,908
22.5%
$13.26
$8,974
Value Indicators
Capitalization Rate
EGIM
Price per SF
Price per Bed
8.6%
2.61
$153.88
$104,167
Total Population
Stable
Median HH Income
$58,816
Chardon, Ohio, is located approximately 40 miles northeast of Cleveland. All of the 42 units are private studio rooms, with
rents ranging from $3,600 to $4,200. The parcel contains extra land; the buyer is planning on breaking ground for 35
additional units in the spring of 2012. The financials include a management fee, but not reserves. The sales data was
verified with Jeremy Stroiman of Evans Senior Investments, who handled the transaction.
IMPROVED SALES PHOTOGRAPHS
Improved Sale 1 – The Terrace at Mountain Creek
Improved Sale 2 – Spring Arbor of Hickory
Improved Sale 3 – Forge Hill Senior Living (Representative)
Improved Sale 4 – The Manor at Autumn Hills
Improved Sale 5 – Carriage Court of Hilliard
Improved Sale 6 – Residence of Chardon
Exhibit
D
Forecasted Statement of Operations
Vantage Point Village at Ashland City
1 Year Stabilized - Internal Not for Publication
Month
Jan, 13
Feb, 13
Mar, 13
Apr, 13
May, 13
Jun, 13
Days
31
79
80
99%
28
79
80
99%
31
80
80
100%
30
78
80
98%
31
78
80
98%
30
79
80
99%
Number of Units Occupied
Maximum Capacity
Percent Occupancy
Room Revenue
Other Revenue
Deposits
TOTAL REVENUE
Jul, 13
31
80
80
100%
Aug, 13
Sep, 13
Oct, 13
Nov, 13
Dec, 13
31
78
80
98%
30
79
80
99%
31
78
80
98%
30
79
80
99%
31
80
80
100%
TOTAL
322,183
3,625
4,500
330,308
291,004
3,274
4,500
298,778
325,748
3,670
3,000
332,418
309,150
3,463
3,000
315,613
316,758
3,579
4,500
324,837
310,740
3,508
3,000
317,248
325,748
3,670
4,500
333,918
319,145
3,579
4,500
327,224
311,790
3,508
3,000
318,298
316,758
3,579
3,000
323,337
311,250
3,508
4,500
319,258
325,748
3,670
3,000
332,418
3,786,022
42,631
45,000
3,873,653
Nursing
Activities
Dietary
Maintenance
Business / Reception
Marketing
Administrator
Total Salaries & Benefits:
General and Administrative Expenses
53,322
7,635
23,995
11,452
7,635
3,309
5,255
112,603
60,715
49,388
6,896
21,673
10,344
6,896
2,988
4,746
102,932
54,839
53,322
7,635
23,995
11,452
7,635
3,309
5,255
112,603
60,984
52,011
7,389
23,221
11,083
7,389
3,202
5,085
109,380
58,496
55,697
7,635
23,995
11,452
7,635
3,309
5,255
114,978
60,446
55,177
7,389
23,221
11,083
7,389
3,202
5,085
112,546
58,757
53,322
7,635
23,995
11,452
7,635
3,309
5,255
112,603
60,984
53,322
7,635
23,995
11,452
7,635
3,309
5,255
112,603
60,446
52,011
7,389
23,221
11,083
7,389
3,202
5,085
109,380
58,757
52,689
7,635
23,995
11,452
7,635
3,309
5,255
111,970
60,446
52,011
7,389
23,221
11,083
7,389
3,202
5,085
109,380
58,757
53,322
7,635
23,995
11,452
7,635
3,309
5,255
112,603
60,984
635,595
89,895
282,528
134,843
89,895
38,956
61,871
1,333,582
714,611
TOTAL SALARIES & EXPENSES
173,318
157,771
173,587
167,876
175,425
171,303
173,587
173,050
168,136
172,416
168,136
173,587
2,048,193
NET OPERATING INCOME
156,989
141,006
158,831
147,737
149,412
145,945
160,331
154,174
150,162
150,920
151,122
158,831
1,825,461
Salaries & Benefits:
Revenue Analysis - 1st Year
Month
Assisted Living C Level 1
Assisted Living B(1) Level 1
Assisted Living B Level 1
Assisted Living A Level 1
Specialty Care A Level 1
Specialty Care B Level 1
Max Cap
2
2
2
10
8
2
9
6
3
9
5
2
8
2
8
Jan, 13
31
2
2
2
10
8
2
9
5
3
9
5
2
8
2
8
Feb, 13
28
2
2
2
9
8
2
9
6
3
9
5
2
8
2
8
Mar, 13
31
2
2
2
10
8
2
9
6
3
9
5
2
8
2
8
Apr, 13
30
2
2
2
10
8
2
8
6
3
8
5
2
8
2
8
May, 13
31
2
2
2
10
7
2
9
6
3
9
5
2
7
2
8
Jun, 13
30
2
2
1
10
8
2
9
6
3
9
5
2
8
2
8
Jul, 13
31
2
2
2
10
8
2
9
6
3
9
5
2
8
2
8
Aug, 13
31
2
2
2
9
8
2
9
6
3
8
5
2
8
2
8
Sep, 13
30
2
2
2
9
8
2
9
6
3
9
5
2
8
2
8
Oct, 13
31
2
2
2
10
8
2
9
5
3
9
5
2
8
2
7
Nov, 13
30
2
1
2
10
8
2
9
6
3
9
5
2
8
2
8
Dec, 13
31
2
2
2
10
8
2
9
6
3
9
5
2
8
2
8
2
2
2
2
2
2
2
2
2
2
2
2
2
2nd Occupants
6
6
6
6
6
6
6
6
6
6
6
6
6
TOTAL Avg Daily Census
86
79
79
80
78
78
79
80
78
79
78
79
80
Month
2nd Occupants
TOTAL Monthly Room Revenue
Overhead Expense-Lee AL
Other Revenue per Day per Resident
Debt Service
Deposits
Maximun Capacity
Jan, 13
Feb, 13
Mar, 13
Apr, 13
May, 13
Jun, 13
Jul, 13
Aug, 13
Sep, 13
Oct, 13
Nov, 13
Dec, 13
Max Cap
Room Rate
123
133
150
115
125
135
105
115
125
98
108
118
165
175
175
185
31
28
31
30
31
30
31
31
30
31
30
31
7,626
8,246
9,300
35,650
31,000
8,370
29,295
17,825
11,625
27,342
16,740
7,316
40,920
10,850
43,400
11,470
6,888
7,448
8,400
28,980
28,000
7,560
26,460
19,320
10,500
24,696
15,120
6,608
36,960
9,800
39,200
10,360
7,626
8,246
9,300
35,650
31,000
8,370
29,295
21,390
11,625
27,342
16,740
7,316
40,920
10,850
43,400
11,470
7,380
7,980
9,000
34,500
30,000
8,100
25,200
20,700
11,250
23,520
16,200
7,080
39,600
10,500
42,000
11,100
7,626
8,246
9,300
35,650
27,125
8,370
29,295
21,390
11,625
27,342
16,740
7,316
35,805
10,850
43,400
11,470
7,380
7,980
4,500
34,500
30,000
8,100
28,350
20,700
11,250
26,460
16,200
7,080
39,600
10,500
42,000
11,100
7,626
8,246
9,300
35,650
31,000
8,370
29,295
21,390
11,625
27,342
16,740
7,316
40,920
10,850
43,400
11,470
7,626
8,246
9,300
32,085
31,000
8,370
29,295
21,390
11,625
24,304
16,740
7,316
40,920
10,850
43,400
11,470
7,380
7,980
9,000
31,050
30,000
8,100
28,350
20,700
11,250
26,460
16,200
7,080
39,600
10,500
42,000
11,100
7,626
8,246
9,300
35,650
31,000
8,370
29,295
17,825
11,625
27,342
16,740
7,316
40,920
10,850
37,975
11,470
7,380
3,990
9,000
34,500
30,000
8,100
28,350
20,700
11,250
26,460
16,200
7,080
39,600
10,500
42,000
11,100
7,626
8,246
9,300
35,650
31,000
8,370
29,295
21,390
11,625
27,342
16,740
7,316
40,920
10,850
43,400
11,470
28
5,208
4,704
5,208
5,040
5,208
5,040
5,208
5,208
5,040
5,208
5,040
5,208
322,183
291,004
325,748
309,150
316,758
310,740
325,748
319,145
311,790
316,758
311,250
325,748
3,750
1.48
45,658
4,500
80
3,750
1.48
45,658
4,500
80
3,750
1.48
45,658
3,000
80
3,750
1.48
45,658
3,000
80
3,750
1.48
45,658
4,500
80
3,750
1.48
45,658
3,000
80
3,750
1.48
45,658
4,500
80
3,750
1.48
45,658
4,500
80
3,750
1.48
45,658
3,000
80
3,750
1.48
45,658
3,000
80
3,750
1.48
45,658
4,500
80
3,750
1.48
45,658
3,000
80
Departmental Wages - Nursing - 1st Year
Census
Assisted Living
Specialty Care Living
Independent Living
Total Census
Specialty Care Census for Staffing
(1 to 16 = 16)
(16 to 32 = 32)
SC Staffing Level - Hours/Day
RN / LPN
DON
Memory Care Coordinator
Care Givers
Jan, 13
31
65
20
0
85
Feb, 13
28
65
20
0
85
Mar, 13
31
66
20
0
86
Apr, 13
30
64
20
0
84
May, 13
31
65
19
0
84
Jun, 13
30
65
20
0
85
Jul, 13
31
66
20
0
86
Aug, 13
31
64
20
0
84
Sep, 13
30
65
20
0
85
Oct, 13
31
65
19
0
84
Nov, 13
30
65
20
0
85
Dec, 13
31
66
20
0
86
32
32
32
32
32
32
32
32
32
32
32
32
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Total Nursing Hours / Week
Total SC Nursing Hours Per Day
AL Staffing Level - Hours/Day
RN / LPN
DON
Care Givers
Total Nursing Hours / Week
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
3.5500
3.5500
3.5500
3.5500
3.5500
3.5500
3.5500
3.5500
3.5500
3.5500
3.5500
3.5500
32.43
5.78
5.78
72.98
116.98
32.43
5.78
5.78
72.98
116.98
32.93
5.87
5.87
74.11
118.78
31.93
5.69
5.69
71.86
115.18
32.43
5.78
5.78
72.98
116.98
32.43
5.78
5.78
72.98
116.98
32.93
5.87
5.87
74.11
118.78
31.93
5.69
5.69
71.86
115.18
32.43
5.78
5.78
72.98
116.98
32.43
5.78
5.78
72.98
116.98
32.43
5.78
5.78
72.98
116.98
32.93
5.87
5.87
74.11
118.78
117.0000 117.0000 118.8000 115.2000 117.0000 117.0000 118.8000 115.2000 117.0000 117.0000 117.0000 118.8000
1.8000
1.8000
1.8000
1.8000
1.8000
1.8000
1.8000
1.8000
1.8000
1.8000
1.8000
1.8000
Total AL Nursing Hours per Day
Payroll Taxes Company Portion
Salaried Wages (@ 5.71 hours/day)
RN / LPN
DON
Care Giver - AL
Care Giver - SC
Total Nursing Monthly Wages
0.00
$17.50
$24.00
$20.00
$9.00
$9.00
0.0995
0.0995
0.0995
0.0995
0.0995
0.0995
0.0995
0.0995
0.0995
0.0995
0.0995
0.0995
$9,913
$4,248
$4,960
$17,856
$11,520
$48,497
$8,953
$3,837
$4,480
$16,128
$11,520
$44,918
$9,913
$4,248
$4,960
$17,856
$11,520
$48,497
$9,593
$4,111
$4,800
$17,280
$11,520
$47,304
$9,913
$4,248
$4,960
$17,856
$13,680
$50,657
$9,593
$4,111
$4,800
$17,280
$14,400
$50,184
$9,913
$4,248
$4,960
$17,856
$11,520
$48,497
$9,913
$4,248
$4,960
$17,856
$11,520
$48,497
$9,593
$4,111
$4,800
$17,280
$11,520
$47,304
$9,913
$4,248
$4,960
$17,856
$10,944
$47,921
$9,593
$4,111
$4,800
$17,280
$11,520
$47,304
$9,913
$4,248
$4,960
$17,856
$11,520
$48,497
Departmental Wages - Other - 1st Year
Month
Census
Days in Month
Assisted Living
Specialty Care Living
Independent Living
Total Census
Maintenance Staffing (1 per 35 Residents)
Activities Staffing (1 per 48 Residents)
RN/LPN Staffing (3.2 Nurses Always)
Dietary (5 to 20,6 to 30, 8 after 30)
Care Giver - SC
Care Giver - AL
Staffing Level - Hours per Day
Activities
Dietary
Housekeeping
Maintenance
Marketing
Administrator
Total Other Hours / Day
Other Staffing Hours Per Resident Per Day
Per Resident Per Day
Activities
Dietary
Jan, 13
31
65
20
0
85
Feb, 13
28
65
20
0
85
Mar, 13
31
66
20
0
86
Apr, 13
30
64
20
0
84
May, 13
31
65
19
0
84
Jun, 13
30
65
20
0
85
Jul, 13
31
66
20
0
86
Aug, 13
31
64
20
0
84
Sep, 13
30
65
20
0
85
Oct, 13
31
65
19
0
84
Nov, 13
30
65
20
0
85
Dec, 13
31
66
20
0
86
3
2
3.2
8
8
8
3
2
3.2
8
8
8
3
2
3.2
8
8
8
3
2
3.2
8
8
8
3
2
3.2
8
10
8
3
2
3.2
8
10
8
3
2
3.2
8
8
8
3
2
3.2
8
8
8
3
2
3.2
8
8
8
3
2
3.2
8
8
8
3
2
3.2
8
8
8
3
2
3.2
8
8
8
10.83
48.01
5.56
15.59
13.56
5.56
8.00
107.10
10.83
48.01
5.56
15.59
13.56
5.56
8.00
107.10
10.95
48.57
5.63
15.77
13.72
5.63
8.00
108.27
10.70
47.44
5.49
15.41
13.40
5.49
8.00
105.94
10.70
47.44
5.49
15.41
13.40
5.49
8.00
105.94
10.83
48.01
5.56
15.59
13.56
5.56
8.00
107.10
10.95
48.57
5.63
15.77
13.72
5.63
8.00
108.27
10.70
47.44
5.49
15.41
13.40
5.49
8.00
105.94
10.83
48.01
5.56
15.59
13.56
5.56
8.00
107.10
10.70
47.44
5.49
15.41
13.40
5.49
8.00
105.94
10.83
48.01
5.56
15.59
13.56
5.56
8.00
107.10
10.95
48.57
5.63
15.77
13.72
5.63
8.00
108.27
1.23
1.23
1.23
1.23
1.23
1.23
1.23
1.23
1.23
1.23
1.23
1.23
104.70
104.70
105.93
103.47
103.47
104.70
105.93
103.47
104.70
103.47
104.70
105.93
0.13
0.56
0.13
0.56
0.13
0.56
0.13
0.56
0.13
0.56
0.13
0.56
0.13
0.56
0.13
0.56
0.13
0.56
0.13
0.56
0.13
0.56
0.13
0.56
Housekeeping
Maintenance
Marketing
Administrator
Total Per Resident Per Day
Salaried Wages (@ 5.71hours/day)
Activities
Dietary
Housekeeping
Maintenance
Business / Reception - 2
Marketing - 1
Administrator - 1
$14.00
$11.00
$9.00
$14.00
$14.00
$17.00
$27.00
Total Other Monthly Wages
0.07
0.18
0.16
0.07
0.09
1.26
0.07
0.18
0.16
0.07
0.09
1.26
0.07
0.18
0.16
0.07
0.09
1.26
0.07
0.18
0.16
0.07
0.10
1.26
0.07
0.18
0.16
0.07
0.10
1.26
0.07
0.18
0.16
0.07
0.09
1.26
0.07
0.18
0.16
0.07
0.09
1.26
0.07
0.18
0.16
0.07
0.10
1.26
0.07
0.18
0.16
0.07
0.09
1.26
0.07
0.18
0.16
0.07
0.10
1.26
0.07
0.18
0.16
0.07
0.09
1.26
0.07
0.18
0.16
0.07
0.09
1.26
$6,944
$21,824
$0
$10,416
$6,944
$3,009
$4,779
$6,272
$19,712
$0
$9,408
$6,272
$2,718
$4,317
$6,944
$21,824
$0
$10,416
$6,944
$3,009
$4,779
$6,720
$21,120
$0
$10,080
$6,720
$2,912
$4,625
$6,944
$21,824
$0
$10,416
$6,944
$3,009
$4,779
$6,720
$21,120
$0
$10,080
$6,720
$2,912
$4,625
$6,944
$21,824
$0
$10,416
$6,944
$3,009
$4,779
$6,944
$21,824
$0
$10,416
$6,944
$3,009
$4,779
$6,720
$21,120
$0
$10,080
$6,720
$2,912
$4,625
$6,944
$21,824
$0
$10,416
$6,944
$3,009
$4,779
$6,720
$21,120
$0
$10,080
$6,720
$2,912
$4,625
$6,944
$21,824
$0
$10,416
$6,944
$3,009
$4,779
$53,916
$48,699
$53,916
$52,177
$53,916
$52,177
$53,916
$53,916
$52,177
$53,916
$52,177
$53,916
General and Administrative Expenses - 1st Year
Nursing Supplies
Activities Supplies
Dietary Supplies
Raw Food
Housekeeping Supplies
Laundry Supplies
Dietary Consultant
Linen and Bedding
Maintenance Supplies
Trash Removal
Maintenance and Repairs
Landscaping
Sprinkler / Alarm Service
Pest Service
Utilities
All Insurance
Accounting Fees
Computer/Software Support
Meals and Entertainment
Van Lease
Van Insurance
Van Gas and Repairs
Dues and Subscriptions
Business Licenses
Employment Advertising
Telephone
Postage/Delivery
Bank Charges
Office Supplies
Office Equipment Rental
Promotion / Public Relations
Yellow Page Advertising
Days in M
$0.17
$0.20
$0.80
$6.50
$0.40
$0.20
14.00
6.66
16.66
2.00
23.33
35.00
4.33
10.50
390.00
216.66
20.00
11.66
1.66
73.33
12.00
13.33
3.33
3.33
8.33
40.00
6.66
3.00
10.00
8.33
216.66
22.00
Jan, 13
Feb, 13
Mar, 13
Apr, 13
May, 13 Jun, 13
Jul, 13
Aug, 13 Sep, 13
Oct, 13
Nov, 13
Dec, 13
31
28
31
30
31
30
31
31
30
31
30
31
$416
$376
$422
$398
$411
$403
$422
$411
$403
$411
$403
$422
490
442
496
468
484
474
496
484
474
484
474
496
1,959
1,770
1,984
1,872
1,934
1,896
1,984
1,934
1,896
1,934
1,896
1,984
17,128
15,470
17,329
16,380
16,926
16,575
17,329
16,926
16,575
16,926
16,575
17,329
980
885
992
936
967
948
992
967
948
967
948
992
490
442
496
468
484
474
496
484
474
484
474
496
434
206
516
980
723
1,085
134
326
12,090
6,716
620
361
51
2,273
372
413
103
103
258
1,240
206
93
310
258
6,716
682
392
186
466
885
653
980
121
294
10,920
6,066
560
326
46
2,053
336
373
93
93
233
1,120
186
84
280
233
6,066
616
434
206
516
992
723
1,085
134
326
12,090
6,716
620
361
51
2,273
372
413
103
103
258
1,240
206
93
310
258
6,716
682
420
200
500
936
700
1,050
130
315
11,700
6,500
600
350
50
2,200
360
400
100
100
250
1,200
200
90
300
250
6,500
660
434
206
516
967
723
1,085
134
326
12,090
6,716
620
361
51
2,273
372
413
103
103
258
1,240
206
93
310
258
6,716
682
420
200
500
948
700
1,050
130
315
11,700
6,500
600
350
50
2,200
360
400
100
100
250
1,200
200
90
300
250
6,500
660
434
206
516
992
723
1,085
134
326
12,090
6,716
620
361
51
2,273
372
413
103
103
258
1,240
206
93
310
258
6,716
682
434
206
516
967
723
1,085
134
326
12,090
6,716
620
361
51
2,273
372
413
103
103
258
1,240
206
93
310
258
6,716
682
420
200
500
948
700
1,050
130
315
11,700
6,500
600
350
50
2,200
360
400
100
100
250
1,200
200
90
300
250
6,500
660
434
206
516
967
723
1,085
134
326
12,090
6,716
620
361
51
2,273
372
413
103
103
258
1,240
206
93
310
258
6,716
682
420
200
500
948
700
1,050
130
315
11,700
6,500
600
350
50
2,200
360
400
100
100
250
1,200
200
90
300
250
6,500
660
434
206
516
992
723
1,085
134
326
12,090
6,716
620
361
51
2,273
372
413
103
103
258
1,240
206
93
310
258
6,716
682
Personal Property Taxes
Real Estate Taxes
TOTAL Gen & Admin Expenses
8.33
55.53
258
1,721
233
1,555
258
1,721
250
1,666
258
1,721
250
1,666
258
1,721
258
1,721
250
1,666
258
1,721
250
1,666
258
1,721
$60,715
$54,839
$60,984
$58,496
$60,446
$58,757
$60,984
$60,446
$58,757
$60,446
$58,757
$60,984
Exhibit
E
PROFESSIONAL QUALIFICATIONS
DANIEL J. SCHNEIDER
SENIOR VICE PRESIDENT
VALUATION & INFORMATION GROUP
Experience
General
Mr. Schneider has been in the healthcare industry since 1997 and has been in
the appraisal and consulting profession since 1998. His appraisal experience
has been concentrated in the valuation of both tangible and intangible assets
of various healthcare properties including medical office buildings, assisted
living, skilled nursing, congregate and continuing care facilities. The interest
valued in his appraisals includes fee simple, leasehold and leased fee estates.
He has also performed several appraisals and market studies of multifamily
properties primarily through the HUD MAP program and Fannie Mae. His
appraisals have been used for financing, litigation, merger and acquisitions
and re-capitalization purposes.
Mr. Schneider researched various issues related to the senior-living industry.
His efforts have been concentrated in Medicare’s prospective payment
methodology and its affect on skilled-nursing facilities. In addition, he has
developed numerous financial models for the valuation of healthcare and
multifamily properties as well as a Medicare calculation that forecasts
expected reimbursement rates.
Prior to joining the Valuation & Information Group, Mr. Schneider was
employed with several financial service firms as an appraiser specializing in
valuations and market research of senior housing and multifamily properties.
Prior to Mr. Schneider’s valuation career, he was employed with a regional
accounting firm specializing in Medicare auditing and performed Medicare
audits for Intermediaries throughout the United States. He has assisted in
auditing hospitals, nursing homes and home health agencies. He has also
been involved in the filing of Medicare cost reports for both hospitals and
nursing homes.
Professional Affiliations
Mr. Schneider maintains certified general real estate appraiser licenses in Massachusetts,
Maryland, New Jersey, Pennsylvania, Michigan, Ohio, Virginia, Connecticut, and Georgia.
Education
Mr. Schneider is a graduate of Rutgers University with a Bachelor of Science degree in
Accounting. Mr. Schneider has attended HUD MAP seminars in Manhattan, New York,
Philadelphia, Pennsylvania and Greensboro, North Carolina.
APPRAISAL/MARKET STUDY ASSIGNMENTS
PERFORMED BY DANIEL J. SCHNEIDER
SINCE JUNE 1, 1998
Senior Housing/Assisted-Living Facilities
Clare Bridge of Eagan, Eagan, MN
Sterling House of Cape Coral, Cape Coral, FL
Sterling Heights of Brandon, Brandon, FL
WovenHearts of Coon Rapids I & II, Coon Rapids, MN
Sterling House of South Bend, South Bend, IN
Hamilton House & Wynwood of Portage, Portage, MI
Chelsea at Fanwood, Fanwood, NJ
Sterling House of Southern Pines, Southern Pines, NC
Outlook Pointe New Port Richey, FL
Sterling House of Alliance, Alliance, OH
Outlook Pointe at Titusville, Titusville, FL
WovenHearts and Sterling Cottage, LaCross, WI
Clare Bridge of Sun City West, Sun City West, AZ
Sterling House of Sun City Center, Sun City Center, FL
Wynewood of Adams, Mars, PA
Bridges at Buckland Hills, Manchester, CT
Bridges at Cross Road, Waterford, CT
Summerville at Litchfield Hills, Torrington, CT
Brighton Gardens of Tampa Bay, Tampa, FL
Brighton Gardens of Greensboro, Greensboro, NJ
Oak Grove Inn, Montgomery, AL
St Martins in the Pines, Birmingham, AL
Proposed Independent Living, Troy, MI
Ateret Avot, Brooklyn, NY
Inn at Chestnut Hill, Columbus, OH
Seaview Manor, Far Rockaway, NY
Colts Neck Assisted Living, Colts Neck Twp., NJ
Harborside Healthcare - Westlake II, Westlake, OH
Carolina House of Pinehurst, Pinehurst, NC
Carolina House of Smithfield, Smithfield, NC
Brighton Gardens of Dunwoody, Dunwoody , GA
Brighton Gardens, Florham Park, NJ
Brighton Gardens of Greensboro, Greensboro, NC
Brighton Gardens of Westlake, Westlake, OH
Brighton Gardens of West Orange, West Orange, NJ
Broadway Plaza at Pecan Park, Arlington , TX
Sterling House of Florence, Florence, NJ
Clare Bridge of Hamilton, Hamilton , NJ
Brighton Gardens of Towson, Baltimore, MD
Fair Oaks Estates, Carmichael, CA
Homewood Residence, Delray Beach, FL
Homewood Residence, Boynton Beach, FL
Cardinal Retirement Village, Cuyahoga Falls, OH
The Fields and Daybreak, Lynchburg, VA
Daybreak of Hanover, Mechanicsville, VA
Woodbury Mews, Woodbury, NJ
Rosemont Court, Warner Robins, GA
Ind. Village of Grand Ledge, Grand Ledge, MI
Ingham Assisted Living, Lansing, MI
The Landing at Canton, Canton, OH
Proposed ALF, Metamora, MI
Skilled-Nursing Facilities
Medilodge of Richmond, Richmond, MI
Medilodge of Yale, Yale, MI
Medilodge of Sterling Heights, Sterling Heights, MI
Faith Medical Care Center, Saint Clair, MI
Serenity Haven Nursing Home, Garland, TX
Woodland Care Center, Camden, NJ
Jersey Shore Center, Eatontown, NJ
Carriage House Manor, South Amboy, NJ
Bishop Nursing Home, Media, PA
IHS of Henderson, Henderson, NV
Majestic Pines Care Center, Hayward, CA
Parkmont Rehabilitation and Care Center, Fremont, CA
Salinas Rehabilitation and Care Center, Salinas, CA
Carriage House Manor, Fullerton, CA
Twin Palms Care Center, Artesia, CA
Valley Manor Rehabilitation Center, Concord, CA
Lakeridge Village Care Center, Lakewood, CO
Allison Care Center, Lakewood, CO
Cambridge Care Center, Lakewood, CO
Rocky Mountain Healthcare Center, Denver, CO
O'Hara Regional Center for Rehabilitation, Denver, CO
Bridgeview Health Care Center, Bridgeview, IL
Harborside Healthcare, New Port Richey, FL
Harborside Healthcare – Clearwater, Clearwater, FL
Harborside Healthcare – Ocala, Ocala, FL
Medco Center of Morganfield, Morganfield, KY
Medco Center of Paducah, Puducah, KY
Mountain City Care Center, Mountain City, TN
Pine Ridge Care Center, Elizabethton, TN
Hales Corner Care Center, Hales Corner, WI
Harborside Healthcare, Terre Haute, IN
Harborside Healthcare – Decatur, Indianapolis, IN
Tandem Health Care, Safety Harbor, FL
Tandem Health Care of St. Petersburg, Seminole, FL
Tandem Health Care of Bayonet Point, Hudson, FL
Orchard Park Care Center, Orem, UT
Royal Care of Avon Park, Avon Park, FL
The Manor at Whitehall, Whitehall, OH
Middlebury Manor Health Care Centre, Akron , OH
Walton Manor Health Care Center, Walton Hills, OH
Bridgeway Care Center, Bridgewater, NJ
Capitol Health Services, Dover, DE
The Highlands, Edison, NJ
Holmdel Healthcare Center, Holmdel, NJ
Harborside Healthcare - Beachwood, Beachwood, OH
Harborside Healthcare, Broadview, OH
Harborside Healthcare - Westlake I, Westlake, OH
Woodland Care Center, McDermott, OH
Hillcrest Manor Care Center, WCH, OH
Maple View Manor, Bainbridge, OH
Wintersong Village of WCH, WCH, OH
Lee Nursing & Rehab Cntr, Pennington Gap, VA
Lincoln Specialty Care Center, Vineland, NJ
New Vista, New Brunswick, NJ
Haven Health of Cromwell, Cromwell, CT
Haven Health Cntr of East Hartford, East Hartford, CT
Haven Health Center of Waterbury, Waterbury, CT
Haven Health Center of Waterford, Waterford, CT
Green Valley Pavilion, Smyrna, DE
Green Valley Terrace, Millsboro, DE
Regal Heights Healthcare & Rehab, Hockessin, DE
Lorien Nursing & Rehab Center, Baltimore, MD
Oakland Care Center, Oakland, NJ
Silver Care Center, Cherry Hill, NJ
Shore Meadows, Toms River, NJ
Royal Health Gate, Trenton, NJ
Lakeview Subacute Care Center, Wayne, NJ
Amboy Care Center, Perth Amboy, NJ
Manahawkin Convalescent Center, Manahawkin, NJ
Oakland Nursing and Rehabilitation, Oakland, MD
Crestmark at Roselawn, Roselawn, Indiana
West Ridge Care Center, Cedar Rapids, IA
Care One Portfolio, NJ, MA, CT, NH
Woburn Nursing Center, Woburn, MA
The Manor of Farmington Hills, Farmington Hills, MI
United Helpers Nursing Home, Canton, NY
Cuyahoga Falls Country Place, Cuyahoga Falls, OH
Tri-State Comprehensive Care Cntr., Harrogate, TN
Evergreen Health & Rehab Center, La Grande, OR
Live Oak Nursing Center, Georges West, TX
Briarcliff Nursing and Rehab Center, McAllen, TX
Town & Country Manor, Boerne, TX
Oakcrest Nursing Center, Rockport, TX
Colonial Manor Care Center, New Braunfels, TX
Guadalupe Valley Nursing Center, Sequin, TX
South Jersey Health Center, Camden, NJ
Jewish Geriatric Home, Cherry Hill, NJ
Haven Health Center of Torrington, Torrington, CT
Grace Healthcare of Clewiston, Clewiston, FL
Grace Healthcare of Lakeland, Lakeland, FL
Grace Hlthcr of St. Petersburg, St. Petersburg, FL
St. James Nursing Center, Detroit, MI
17 Michigan Facilities, Various, MI
Autumnwood of McBain, McBain, MI
Autumnwood of Deckerville, Deckerville, MI
Courtney Manor, Bad Axe, MI
James Square Health & Rehab Centre, Syracuse, NY
Gowanda Nursing Home, Gowanda, NY
Arbors at Delaware, Delaware, OH
Atlantis Rehab & Nursing Center, Carneys Point, NJ
Americana Nrsng & Rehab Center, Maple Shade, NJ
Teaneck Nursing Center, Teaneck, NJ
Providence Nursing & Rehab Center, Trenton, NJ
17 Michigan Facilities
Egle Nursing Home, Lonaconing, MD
Holly Hill Manor, Towson, MD
Aberjona Nursing Center, Winchester, MA
The Manor of Novi, Novi, MI
Sunrise Manor Nursing Home, Bay Shore, NY
Hospitals and Psychiatric Facilities
Rolling Hills Hospital, Ada , OK
Havenwyck Hospital and Center, Auburn Hills, MI
Riveredge Hospital, Forest Park, IL
Greater Southeast Community Hospital, DC
Harbor Oaks Hospital, New Bedford, MI
French Hospital Medical Center, SLO, CA
Arroyo Grande Comm. Hospital, Arroyo Grande, CA
Braxton Hospital, Braxton, WV
Mercy Mount Clemens Corporation, Clinton, MI
Portsmouth Regional Hospital, Portsmouth, NH
Multifamily/Affordable Housing Properties
Dessert Palms, Mesa, AZ
Palm Oasis, Phoenix, AZ
Fillmore Place, Phoenix, AZ
Palms at Mesa, Mesa, AZ
Pines at Prescott, Prescott, AZ
Sonora Vista I & II, Mesa AZ
Briarwood Gardens, Grandview, MO
Riverbend Apartments, Milledgeville, GA
Moultrie Manor, Moultrie, GA
The Charter House, Silver Springs, MD
Marsh Landing Apartments, Portsmouth, VA
Courtview Manor, Florence, AL
Green Meadows Townhomes, Macon, GA
Greenfield Apartments, Seneca, SC
Laurens Terrace, Laurens, SC
Talladega Downs, Talladega, AL
Trinity Manor Apartments, Augusta, GA
Fountain Plaza, Pittsburg, CA
South Park Apartments, Elyria, OH
Kenyon Manor, Buckley, WA
Garden Court Apartments, Lancaster, PA
Landau Apartments, Clinton, SC
Kenton Village Apartments, Kenton, OH
Anthony Arms Apartments, Macon, GA
Hillview Townhouses, Rockford, MI
Somerset Apartments, Lansing, MI
Campbellstone Apartments North, Atlanta, GA
Oceanside Manor, Brunswick, GA
Summerwood Apartments, Redmond, WA
Ukrainian Village, Warren, MI
Tivoli Manor, Warren, MI
Evangelical Manor, Detroit, MI
The Friendly Summit, Locust Grove, GA
Across The Park, Detroit, MI
Danish Village, Rochester Hills, MI
Westland Meadows, Kalamazoo, MI
Drake Apartments, Farmington Hills, MI
Epsilon Apartments, Farmington Hills, MI
Harbor Village Apartments, Holland, MI
Art Center, Detroit, MI
West Virginia Manor, Bluefield, WV
Kingston Apartments, Macon, GA
Columbia at MLK, Atlanta, GA
Columbia at Edgewood, Atlanta, GA
Serenity Place, Grand Ledge, MI
Braidwood Manor, Davison, MI
Gates on Conway, Atlanta, MI
Heritage Village, Redding, CA
Village Park Apartments, Dearborn, MI
Town Center, Highland Park, MI
McCoy Townhouses, Detroit, MI
Irvis Towers, Pittsburgh, PA
Butler Towers, Butler, PA
Arbor Village, Flint, MI
Mari-Dan Miller Farms, Swartz Creek, MI
Auxora Arms Apartments, Little Rock, AR
Greenhouse Apartments, Detroit, MI
Orchestra Towers, Detroit, MI
HUD MAP Appraisals and Market Studies
Project/ Location
Hillview Townhouses, Rockford, MI
Somerset Apartments, Lansing, MI
Harbor Village Apartments, Holland, MI
Clio Woods Apartments, Flint, MI
Whitney Young, Kentwood, MI
Blair Park, Jackson, MI
Clement Kern, Detroit, MI
Irvis Towers, Pittsburg, PA
Butler Towers, Butler, PA
West Virginia Manor, Bluefield, WV
Serenity Place, Grand Ledge, MI
Ukrainian Village, Warren, MI
Tivoli Manor, Warren, MI
Evangelical Manor, Detroit, MI
Spring Valley Apartments, Caspian, MI
Park Ridge Commons, Greece, NY
Beverly Hills Senior Apartments, Beverly Hills, CA
Homecrest North and South, Silver Springs, MD
Antonion Towers, Eaton, PA
Neumann Apartments, Saint Clair, PA
Queen of Peace Apartments, Pottsville, PA,
Holy Family Apartments, Bethlehem, PA
Queen of Angeles Apartments, Reading, PA
Danish Village, Rochester Hills, MI
Beautiful Light Inn, San Bernardino, CA
Abundant Life Towers I, Baltimore, MD
Abundant Life Towers II, Baltimore, MD
Belmont Independent Living, DC
Drake Apartments, Farmington Hills, MI
Epsilon Apartments, Farmington Hills, MI
Program
223(f)
223(f)
223(f)
223(f)
223(f)
223(f)
223(f)
223(f)
223(f)
223(f)
223(f)/202
223(f)/202
223(f)/202
223(f)/202
223(f)/202
223(f)/202
223(f)/202
223(f)/202
223(f)/202
223(f)/202
223(f)/202
223(f)/202
223(f)/202
223(f)/202
223(f)/202
223(f)/202
223(f)/202
223(f)/202
223(f)/202
223(f)/202
Ridgecrest Apartments, Salem, VA
Parc Development Homes, Peoria, IL
Anthony Arms Apartments, Macon, GA
Riverbend Apartments, Milledgeville, GA
Moultrie Manor, Moultrie, GA
Chidester Place, Ypsilanti, MI
Kingston Apartments, Macon, GA
Columbia at MLK, Atlanta, GA
Columbia at Edgewood, Atlanta, GA
Campbellstone Apartments North, Atlanta, GA
Oceanside Manor, Brunswick, GA
Summerwood Apartments, Redmond, WA
Braidwood Manor, Davison, MI
Gates on Conway, Atlanta, MI
Heritage Village, Redding, CA
The Friendly Summit, Locust Grove, GA
Gardenview Apartments, Flint, MI
Town Center, Highland Park, MI
Auxora Arms Apartments, Little Rock, AR
Art Center, Detroit, MI
Greenhouse Apartments, MI
Coldwater Crossings, Coldwater
The Fields and Daybreak, Lynchburg, VA
Daybreak of Hanover, Mechanicsville, VA
Lee Nursing & Rehab Cntr, Pennington Gap, VA
Capitol Healthcare, Dover, DE
Riverside Hospital, Forest Park, IL
Havenwyck Hospital, Auburn Hills, MI
Heartland Hospital, Nevada, MO
Tri-State Comprehensive Care, Harrogate, TN
Medco Center of Paducah, Paducah, TN
Morganfield Nursing & Rehab, Morganfield, KY
Fair Oaks Estates, Carmichael, CA
Empress Rehab Center, Long Beach, CA
Hales Corner Care Center, Hales Corner, WI
Evergreen Health and Rehab Center, La Grande, OR
Radford Nursing & Rehabilitation Center, Radford, VA
Chestnut Hill Assisted Living, Chestnut Hill, PA
Ludington Woods Living Center, Ludington, MI
Chancellor at Del Mar, Del Mar, DE
White Oaks Assisted Living, Lawton, MI
Stonehedge Nsg Home of Chittenango, Chittenango, NY
Stonehedge Health & Rehab Cntr, Rome, NY
New Haven Residential Care Home, New Haven, CT
223(f)/202
223(f)/202
221(d)(4) Rehab
221(d)(4) Rehab
221(d)(4) Rehab
221(d)(4) Rehab
221(d)(4) Rehab
221(d)(4) Rehab
221(d)(4) New Construction
221(d)(4) Rehab
221(d)(4) Rehab
221(d)(4) Rehab
221(d)(4) Rehab
221(d)(4) Rehab
221(d)(4) Rehab
221(d)(4) Rehab
221(d)(4) Rehab
221(d)(4) Rehab
221(d)(4) Rehab
221(d)(4) Rehab
202/221(d)(4) Rehab
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
Westside Manor, East Hampton, CT
Brinton Woods Nrsg. & Rehab Cntr., Sykesville, MD
Anchorage Nrsg & Rehab Cntr, Salisbury, MD
Blue Point Nrsg & Rehab Cntr, Baltimore, MD
Oakland Nursing and Rehabilitation, Oakland, MD
Berlin Nursing and Rehab Center, Berlin, MD
Sava Porfolio, WI, MI, MD, GA, AL, NC, WV & MS
8 SNFs in West Virginia
8 SNFs in Upstate New York
Egle Nursing Home, Lonaconing, MD
West Ridge Care Center, Cedar Rapids, IA
Aborjona Nursing Center, Winchester, MA
United Helpers Nursing Home, Canton, NY
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
232/223(f)
THOMAS R. LETTIERI
VICE PRESIDENT
Experience
General
Mr. Lettieri has been engaged in the consulting and valuation profession
since 1995 and the healthcare industry since 1993. His experience includes
the completion of appraisals, business valuations and financially feasibility
studies of various healthcare and senior housing assets, including primary
care and multi-specialty physician group practices, hospitals, clinics, free
standing outpatient facilities, continuing care retirement facilities, assisted
living facilities and skilled nursing facilities. The purpose and use of these
studies includes project acquisition, project development, traditional or REIT
financing, tax-exempt bond offerings, CMBS underwriting, work-out studies
of distressed operations, HUD mortgage insurance financing, M&A advisory,
and corporate strategic planning.
Mr. Lettieri has developed detailed market assessments to analyze the market
feasibility of proposed and existing healthcare and real estate projects. Real
estate assets have included market rate apartment complexes and government
subsidized apartment complexes that were financed, in part, through low
income housing tax credits. These engagements include defining a primary
market area, detailing area competition and estimating demand in the defined
primary market area.
Mr. Lettieri’s healthcare experience has also included the formation and
development of primary care and multi-specialty physician group practices,
physician practice compensation plans and primary care physician
development plans for regional hospitals and healthcare systems. Prior to
joining Valuation and Information Group, Mr. Lettieri was formerly
employed with a nationally recognized healthcare-consulting firm as well as
a regional healthcare system located in the Philadelphia area.
Mr. Lettieri is a professional member of the Temple University Healthcare Administration
Alumni (TUHAA). Mr. Lettieri maintains certified general real estate appraiser trainee licenses in
Florida, Maine, Maryland, New Jersey, New York and Pennsylvania.
Education
Mr. Lettieri possesses an MBA, with a concentration in Healthcare Administration from Temple
University, Philadelphia, Pennsylvania. Mr. Lettieri also graduated from La Salle University,
located in Philadelphia, Pennsylvania, with a Bachelor of Science degree in Business
Administration, concentrating in Finance.
JEAN-PIERRE LoMONACO, MAI
PRESIDENT
Experience
General
Mr. LoMonaco entered the real estate consulting industry in 1989.
Assignments include market feasibility analysis, appraisal reports, lease
analysis, highest and best use studies, and general consulting. Mr.
LoMonaco’s expertise has been used by clients for lending, litigation
support, asset allocation, due diligence, lease negotiation, tax appeals,
bankruptcy proceedings and market and site selection.
Mr. LoMonaco is the President of Valuation & Information Group, Culver
City, CA. Experience includes appraisal and market feasibility assignments
for a wide variety of property types in the senior housing and healthcare
related industry. Property types included senior apartments, independent
living, congregate, assisted living, skilled nursing, Alzheimer’s, medical
office buildings, surgery centers, dialysis centers, rehabilitation hospitals,
psychiatric hospitals, specialty hospitals and general acute care hospitals.
Assignments have been conducted throughout the United States.
Prior to joining the Valuation & Information Group Mr. LoMonaco was
Vice President of a national consulting company specializing in healthcare
related assets and was responsible for the western real estate division.
Duties included client servicing, staff development and general oversight of
the western division.
Member of the Appraisal Institute (MAI); Certified General Real Estate Appraiser in Arizona,
California, Colorado, Georgia, Illinois, Maryland, Massachusetts, Michigan, Nevada, Ohio,
Oregon, Pennsylvania, Texas, Utah, and Washington
Education
By continually attending classes, seminars and conferences, Mr. LoMonaco routinely exceeds the
minimum continuing education requirements of the Appraisal Institute and State requirements.
Mr. LoMonaco has moderated panels at senior housing / long-term care conferences. He received
his Bachelor of Science degree in Finance and Real Estate Emphasis at the University of
Southern California.
HOWARD LEE
FINANCIAL ANALYST
Experience
General
Howard Lee entered the real estate appraisal field in August 2010. Currently he is a
Financial Analyst at Valuation & Information Group, Culver City, CA. Experience
includes appraisal and consulting assignments for a variety of property types in the
real estate, senior housing and healthcare-related industries. Property types include
nursing homes, assisted living facilities and skilled nursing facilities. Assignments
have been conducted throughout the United States.
Education
Mr. Lee received his Bachelor of Science degree in Mathematics from the University of Michigan, and
his Master of Arts and Candidate of Philosophy degrees in Mathematics from the University of
California, Los Angeles.

Ashland City Report - Cheatham County Chamber of Commerce

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