Medical Examiner Facility

[Terry L. Hart]

I have been tasked with performing an appraisal of a medical examiner facility. It is a specialty built facility for the sole purpose of the business of medical examinations, thus it has body coolers, examination rooms with special equipment, a morgue, specimen analysis rooms, specialize cooling systems, air locks, etc. Has anyone done one of these in your past?

 

[sputnam]

Interesting assignment.

 

[Meandering]

These days it will be hard to find arm's length medical building sales, due to the incorporation of the field, you'll find that most medical buildings are "managed" and owned by companies that are not medical companies or doctors. I would suggest you contact some of these medical building "managers" to ask for comps or anything they might be considring transferring, but definitely to ask them for arm's length rents for similar buildings.

Here is a Michigan company
read through their web page and you'll see what the hints are.

Hughes Management — Hughes Management Group - The Company

hughes-mgmt.com

 

[Terrel L. Shields]

I think I would try to make sure I had a good cost approach

I am working on a gun and archery store. It has an archery range - fairly simple. But the gun range is the highest end one I've ever seen. I mean seriously complex. Sound absorbing walls, baffled ceiling, metal target capture tanks that catch and save all the bullets. For example, they dump the metal when full and sell some $10,000 worth of lead and brass, copper, etc. when full. It cost $469kk 12 years ago.

I have a couple comps, but they are old. It's gonna be a thinking thing.

 

[Terry L. Hart]

These days it will be hard to find arm's length medical building sales, due to the incorporation of the field, you'll find that most medical buildings are "managed" and owned by companies that are not medical companies or doctors. I would suggest you contact some of these medical building "managers" to ask for comps or anything they might be considring transferring, but definitely to ask them for arm's length rents for similar buildings.

Here is a Michigan company
read through their web page and you'll see what the hints are.

Hughes Management — Hughes Management Group - The Company

hughes-mgmt.com

Thank you for the comments

 

[Terry L. Hart]

I think I would try to make sure I had a good cost approach

I am working on a gun and archery store. It has an archery range - fairly simple. But the gun range is the highest end one I've ever seen. I mean seriously complex. Sound absorbing walls, baffled ceiling, metal target capture tanks that catch and save all the bullets. For example, they dump the metal when full and sell some $10,000 worth of lead and brass, copper, etc. when full. It cost $469kk 12 years ago.

I have a couple comps, but they are old. It's gonna be a thinking thing.

Cost Approach next to impossible due to complexity of structure, no details of construction provided nor will the Med Ex office provide info they feel is confidential. Thanks for the comments though

 

[Terrel L. Shields]

Cost Approach next to impossible due to complexity of structure, no details of construction provided nor will the Med Ex office provide info they feel is confidential. Thanks for the comments though

Then I would turn the assignment down. They are asking you to pull a number from the air. Public facilities are typically appraised by the cost approach. In other words, I am saying the Cost Approach is a REQUIRED approach as per USPAP.

 

[TerryRohrer]

Then I would turn the assignment down. They are asking you to pull a number from the air. Public facilities are typically appraised by the cost approach. In other words, I am saying the Cost Approach is a REQUIRED approach as per USPAP.

How will you fabricate depreciation deductions? Many special-use facilities cost far more to construct than they can command in the open market, and that can't be measured from an age-life table.

 

[Terrel L. Shields]

How will you fabricate depreciation deductions?

It does not make a dam... Every old textbook will tell you to use the cost approach for public type buildings. There are no comps and pretending they might serve some other purpose or using non-public buildings as sales??? You have the same issue with the SA don't you? What is the depreciation? Depreciation applies to sales too. But where will you find another facility remotely similar. I believe that the cost approach is necessary for credible results and thus is required to be developed. Same with a fire station,etc.

Speaking of which a few years ago I appraised a fire station. It was only 3 years old. I found a few sales out of state of old fire stations. When you estimated the Replacement Cost vs the sale price sans land, then divided the depreciation by the age, all the sales were between 1 and 3% annual depreciation. THAT is about the best you can expect - address accrued depreciation and screw functional and external- USPAP only requires you to address accrued depreciation.

On the gun store I am valuing, I will address it like the one I did in the spring. I want a good handle on the cost to build plus the land value, then with what few sales I have (old as they are) I will try to address the annual depreciation of the building. I know what the owner spent to build the archery range and the gun range. And when he built it. So, that means the historical multiplier is probably the best way to estimate the current RCN. The building is fairly ordinary open span metal frame, brick exterior, metal roof, dual AC units overhead, and 2 restrooms. I am going to sum up the various costs for a current RCN and thes estimate some amount of depreciation. I am appraising the real estate not the building so I have a couple comps that I have numbers for the inventory, F & F, and some idea of the BEV. I have to back into a reasonable number for the RE only. It is the same process that AI teaches in their class. Income, unfortunately will reflect the BEV and TAB not just the real estate.

 

[Sadie]

Cost Approach next to impossible due to complexity of structure, no details of construction provided nor will the Med Ex office provide info they feel is confidential. Thanks for the comments though

I have no insight but am curious about the inspection.