There is probably no better measure of a seniors housing property’s quality than how much it pulls in per unit. When it comes down to it, amenities are nice, modern features are important, but cash is king. As acuity is rising in the seniors housing market, communities are taking in more cash per unit (even if the margin may be declining). And a newer, high-quality property can obviously charge more in rent than a 40-year old property. Both of these factors led to a significant rise in the average NOI per unit in 2014 (according to the Senior Care Acquisition Report), going from $12,000 in 2013 to $14,300 per unit in 2014 for assisted/independent living, a 19% increase. That is also higher than the previous record of $12,600 per unit, set in 2011. With the economy improving, acuity rising, and sellers bringing their high-quality, well-run properties to the market, this trend may continue.
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Are older facilities, Approx. 40 years, worth looking/investing in ?
Yes they are, but only if they are in a good location and if the building can be adapted to today’s higher acuity use. But the market is the key: are there many Medicare discharges from hospitals? If not, it will be a tough slog.