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Montana Freemason May 2015 Volume 91 Number 2
Financial and Census Overview Associates to provide the real estate property valuations
A cursory review of the financial statements since 2004, of the various portions of the real estate owned by the
indicate that the combined restricted and unrestricted Masonic Home Corporation.
assets of Masonic Home of Montana, Inc (MHM) and Property Valuation provided by Realty 406
the Masonic Home Foundation (MHF) have been Per the direction of the Grand Lodge of Montana and
reduced from over $6 Million in 2004 to approximately under the authority of the Special Committee, the
$1.26 Million in 2014. The balances of the various following report and summary are submitted for review
accounts are as follows: of the Craft. The summary is current as of March 20,
• Royal Bank of Canada Wealth Management 2015 and is intended to be valid for approximately 90
days.
o Masonic Home of Montana Foundation Many of the expenses associated with these properties
funds $605,710.00 as of Jan. 2015 are absorbed in the Masonic Home’s operation.
Investment models used expenses generally associated
o Knights Templar fund $6,321.05 as of Jan. with the subject property reviewed. Supporting
2015 documentation is available through the Grand Lodge
Secretary’s office for reference. This report assumes
o Auchard Trust fund $662,746.95 as of Jan. aggressively positioning the various properties for
2015 sale in our local market to maximize returns while
minimizing the time to do so. The findings are offered
• Gas/mineral leases income $4,852.53 in FY as a range with the higher number being the assumed
2014 listing price, the lower being the base expectation. It is
likely that something closer to the middle would be a
• Checking account totals as of April 20, 2015 reasonable expectation.
o Big Valley Storage $9,558.88 Big Valley Storage Units: $ 550,000 - $ 600,000
o Restricted Use Account $55,146.04 • The 98 unit self-storage facility is generally located
o Masonic General Account $52,496.54 on the North-East corner of a 406 acre parcel and
o Residential Services $ 106.03 more specifically located at Lincoln Road and
Collins Dr.
GAAP for Non-Profits recommend unrestricted • The valuation assumes and recommends that the
operating reserves at a minimum of 3-6 months of the storage area will be subdivided into its own 10 acre
annual expense budget. +/- parcel, allowing for maximum value, future
Factors impacting the Masonic Home reserves between flexibility and liquidity.
2004 and 2015 are as follows: • Since many of the operating costs are absorbed by
• The transition of the operation of the Masonic the Masonic Home, expenses generally attributable
Home from a true charity (e.g., providing heavily to this type of investment property were utilized in
subsidized, if not free, residency to Masons and this valuation.
affiliates) to a business model (e.g., allowing non- • Actual net operating income (NOI) may differ
Mason related persons to reside at the Masonic from assumption.
Home and accepting Medicaid recipients). • The valuation reflects typical rates of return and
• Extensive remodeling and updating of the facility. other benchmarks generally sought by an investor.
• A significantly “down” investment market adversely • This facility appears to be a good investment
impacting the Masonic Home Foundation’s return providing a steady rate of return
on investment. • Estimated Capitalization Rate per assumptions:
• By restructuring its operations, the Masonic Home 7.69% ( Industry expectation is 7-8% )
has had eighteen consecutive months of positive cash • Estimated annual net operating income (NOI) per
flow (income exceeding expenses) for the first time in assumptions: $ 46,139
memory -- without requiring any additional monies 162 Acre Parcel: $ 700,000 - $ 850,000
from the Masonic Home Foundation -- allowing the • 162 acre parcel with central pivot irrigation (pivot
Masonic Home to begin rebuilding its reserves. not included), 2 bed 1 bath ranch house in average
At the time of this report, there are currently 34 condition for age, 2400 SF metal barn, pole lean to,
residents. Fewer than half (fourteen) of which are 3 stall garage, several outbuildings/barn in need of
Masonically affiliated as currently and broadly defined repair.
as Master Masons, wife, and widows; a woman • Gross rental income from house is $7,059 in 2014
member in good standing in an Eastern Star Chapter; • Gross cropland lease based on $22/acre on 160
or a mother, mother-in-law, daughter, father-in-law, acres is $3,520 in 2014
son, sister, brother or grandparent of a Master Mason • Total gross income estimated at $10,579 in 2014
in good standing.
Masonic Home Property Valuation Summary
The Special Committee, to determine the market,
or sale, value of the Masonic Home’s real property
solicited the services of Bro. Steve Netschert of Realty
406 and Travis Brazill of Green and Green Realty
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