SNF known as Skilled Nursing Facility. Residents typically need a higher level of care for a longer time and is a less expensive alternative than a lengthy hospital stay. These facilities are generally reimbursed from government or insurance agencies, such as Medicare, for the services they offer their residents. Having experience is a key factor when determining the eligibility of loan. Value is heavily tied into the success the business along with the location and quality of the building.
ALF known as Assisted Living Facility. The residents interested in this type of living facility generally need less care than a SNF, but still might need assistance with average daily living needs. This is where you might also find a facility that offers memory care for those with memory loss. These facilities can vary from a luxury hotel style of living to a very basic room and board. Most of these facilities are private pay, meaning the residents pay, but some states will cover all or part of the costs for those who cannot afford it on their own. Having good experience is also a key factor and value is also tied to the success of the business along with the location and quality of the building.
Senior Apartments are available for those over 55+ years and do not need a higher level of care. Some of these units may offer full kitchen or only a kitchenette with a central dinning. Many lenders look at these properties not much different than traditional apartments.
Hospitals can be a critical access hospital in a rural location to community hospitals to large conglomerate hospitals. Some may also have emergency rooms and others may not. This is the most difficult type of healthcare property to finance.
Medical Clinics can be owner-occupied or leased to third parties. In either case, you need to underwrite both the tenants’ financials and the market rent. This property is not much different than a typical single tenant office building except for the tenant improvements and build-outs are much more specialized which adds value to the rents and building.
Medical Office buildings are generally located near a hospital or other healthcare centers that need multiple doctors nearby to either service the hospital or have compliment services and benefit to being near other medical professionals. Like medical clinics, these are not dissimilar to an office building, but the type of tenant improvements, the locations, and quality of tenant mix can make this asset type more attractive to lenders.
