Last week, we examined the difference in price between the low and high ends of the skilled nursing M&A market. As opposed to just using the average or median, breaking down the market by quartile allows us to separate the higher end of the market from the lower end, since many sellers think the average has no meaning to their particular properties that may be newer, in better locations or just more profitable (and often all three). So, what about the seniors housing (independent and assisted living combined) market? Like the overall average seniors housing price in 2016, the upper quartile price in 2016 of $241,500 per unit rose from its 2015 level ($227,900 per unit) and was just off 2014’s record high of $250,800 per unit. 2016 continues the upward trend in this value dating back to 2012, when the upper quartile was just $171,800 per unit, lower than even the average seniors housing price per unit recorded over the last few years.

But there were fewer communities sold in 2016 priced about $200,000 per unit, at 40% of the share compared with 45% in 2015. That said, properties that sold for $300,000 per unit or higher represented a larger share (11%) in 2016 than in 2015 (9%), and those communities that sold for $500,000 per unit or higher were 4% of 2016’s total share, compared with just 0.8% in 2015. Buyers are clearly paying up for quality properties, and as properties that were built in the early stages of the development boom in 2014 open, stabilize and become acquisition targets, we can expect to see more of those high values.

The median stayed virtually the same year-over-year ($169,000 per unit in 2015 versus $168,900 per unit in 2016), but the lower quartile fell significantly from $133,300 per unit in 2015 to $103,600 per unit in 2016, a 22% decrease. For more information check out our 2017 Senior Care Acquisition Report, available now.