Last week, we examined what buyers paid for “A” quality assisted living properties versus “B” quality, according to the 22nd Edition of The Senior Care Acquisition Report. But what about independent living, which has not received the same attention that assisted living has in recent years and has not seen as much new construction (which are often categorized as “A” properties). Nevertheless, hitting new heights this year was the average price paid for “A” quality independent living communities. Those properties, which we determine on several factors including age, size and location, sold for an average of $285,800 per unit, or about $8,000 per unit higher than in 2015.
“B” properties, on the other hand, jumped 85% from $72,900 per unit in 2015 to $134,600 per unit in 2016. That in large part was influenced by an eight-property portfolio (“B” quality) valued above $200,000. Removing that transaction from the analysis, the average price per unit for “B” properties drops to about $100,000 per unit. That is still significantly higher than in 2015, and shows that there were fewer low-quality sales in 2016. But what is also interesting is that “B” properties accounted for nearly 50% of all that were sold in 2016 (47%), when historically they represent only one third of the M&A market. So, despite their larger share, “B” properties did not prevent an increase in the overall average price per unit for independent living. For more statistics on “A” versus “B” properties, check out the report.
