Tuesday, March 29, 2011

Improving an Existing Property May Be a More Profitable Approach Than Seeking out New Opportunities

CHICAGO, IL--Senior housing property management and financial consultant Brent Holman-Gomez (top right photo) thinks that senior housing/healthcare owners looking for new opportunities to make money may be well advised to consider the potential of assets currently owned.

“When a property seems to be operating at its peak, many decide to start looking at new opportunities to make money. I say consider the bird in hand,” he observes.

Holman-Gomez is a Senior Vice President for Originations, Operations and Asset Management for Cambridge Realty Capital Companies, one of the nation’s leading senior housing/healthcare lenders.

The company’s principal investment strategy includes direct property acquisitions and joint ventures, sale/leasebacks and the acquisition of distressed debt through its Cambridge Investment and Finance Co. business unit.

Writing in the company’s PulsePoints blog, Holman-Gomez advises that unless the property is at 100 percent occupancy and at the market’s highest rent level with a controlled expense ratio, the most profitability available is in the present property.

“Compared to a new business venture, operating improvements to your current facility are much more lucrative, as they generally cost much less, possess solid upside potential and are a reinvestment in your existing business that lowers your existing risk.

“More likely than not, focusing on a currently owned property will be more rewarding than taking on the unknown challenges of a new property,” he suggests.

The PulsePoints blog posts on the www.cambridgecap.com website. Holman-Gomez further observes that any improvement in a senior housing business’ ability to produce a steady income will improve its value nearly tenfold (when based on property valuations per dollar of income).

“Empty units are potential goldmines of profitability. Adding some new excitement and energy to the things that seem mundane about your business by re-training staff, marketing and making cosmetic improvements can be the map that leads you to the pot of gold,” he said.

Evan Washington
Phone: (312) 521-7604
Fax: (312) 357-1611

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