With at least five transactions priced over $100,000 per bed so far this month, July may be a record for high-priced SNF sales.
The skilled nursing facility M&A market continues to lead the way in terms of where the post-acute sector may be heading. So far in the past three weeks, we have seen five deals close with values ranging from just over $100,000 per bed to over $200,000 per bed. Yes, a few have been in the northeast, which can be expected, but these high-priced sales go all the way from North Carolina to Texas to California. This is not a regional phenomenon. It is a change that is going on in the sector that will be part of the evolution of who takes care of the elderly, how we do it, and who pays for it. And while I say “elderly,” it is not just the elderly, but the care levels that can and should be provided in SNFs that have the capability of doing so. But as this evolves, there will also be implications for other providers, especially in the assisted living market. Acuity levels will rise, costs will rise, revenues will rise but margins will decline, lengths of stay will decline, and staffing will get more difficult to find and train. My belief is that over the next 10 years we are going to see some major transformations.