As prices rise, we would expect cap rates to depress accordingly to reflect the increasing values. However, even though the average price per unit for independent living properties fell 22% from $246,800 in 2014 to $192,900 in 2015, the average IL cap rate dropped by 40 basis points from 7.4% in 2014 to 7.0% in 2015. What contributed to this anomaly? First, independent living prices reached unsustainable heights in 2014, propped up by a number of sales of high-quality properties by owners drawn into the frothy market. So, it is not surprising that the average IL price fell to a still-respectable value (the second-highest average price, in fact). Second, there were simply fewer high-cap rate deals, including just two above 9% (keep in mind the average cap rate for independent living five years ago was 9.4%). And third, perhaps as overall occupancy for IL has risen lately, while assisted living has declined, and there are far fewer planned construction starts for this property type, investors view independent living as even less of a risk than in the past.