Scenario I – Disposition for Redevelopment focused on assessing the property’s potential value if sold for redevelopment. Allegro conducted a market study of comparable land transactions and adjusted historical data to reflect current economic conditions. The analysis considered two primary redevelopment paths: senior living and market-rate housing. Each path was evaluated based on land use compatibility, demographic trends, and the likelihood of securing necessary zoning variances. The study also accounted for the costs and implications of demolishing the existing structures, recognizing that the facility’s specialized design could deter potential buyers seeking more flexible development opportunities.
Scenario II – Lease for Alternate Use explored the feasibility of leasing the facility to an alternate user while maintaining ownership. Allegro developed a ten-year financial model that incorporated operating costs, capital expenditure forecasts, and projected rental income. The analysis identified potential tenant types—primarily within the healthcare and social services sectors—that could utilize the facility with minimal modifications. To ensure a valid comparison with the disposition scenario, Allegro calculated the net present value of the projected lease income alongside a future reversion value of the property. This approach provided a holistic view of the long-term financial return associated with retaining the asset.
