The Price of Empty Units in Assisted Living

When comparing stabilized and non-stabilized assisted living communities (with stabilized defined as having an occupancy equal to or higher than 85%), there is a clear difference in the price per unit, according to the 2017 Senior Care Acquisition Report. The gap between stabilized and non-stabilized properties grew year over year from $61,500 per unit in 2015 ($139,100 per unit for non-stabilized and $200,600 per unit for stabilized) to $87,200 in 2016 ($147,700 per unit for non-stabilized and $234,900 per unit for stabilized). That does not surpass the disparity recorded in 2014, however, when stabilized properties sold for $230,300 per unit compared with just $139,000 per unit for non-stabilized, a $91,300 difference. Nevertheless, we see a consistent theme between 2014 and 2016: buyers will pay up for well operating properties. With occupancy lagging across the assisted living sector, heavily influenced by an increase in new construction, those communities that are already stabilized and established in their localities are presumably safer bets for investors. That, of course, comes at a price.