On October 12, we hosted a webinar called “Investing in Skilled Nursing Facilities,” where our editor, Steve Monroe, and a panel of experts, including Joseph Deans of Diversicare Healthcare Services, Steve LaForte of Cascadia Healthcare and Talya Nevo-Hacohen of Sabra Health Care REIT, discussed the skilled nursing M&A environment today. That spanned from who is buying SNFs and why, the discrepancy between record-high values and current industry headwinds, and whether SNFs will win the battle against LTACs and IRFs for the post-acute patient, among several other topics. But we also brought in the audience to get their opinion on a few issues too, and here are the results:
- Do current SNF cap rates reflect the current level of operating risk?
- Which is the riskier SNF?
High acuity, all-Medicare SNF 36%
Low acuity, 70% Medicaid SNF 64%
- Today, would you buy, or lend to, a SNF?
That last response is not particularly surprising, since a majority of people attending a webinar called “Investing in Skilled Nursing Facilities,” would already be interested in investing in one, or more. But the second question helps explain the current split in the SNF market between traditional skilled nursing facilities (often built in the 1960s or 70s) and those newly built transitional care facilities catering to the Medicare/private pay patients. Cap rates also tend to be lower for those transitional care facilities, hence, their lower perceived risk.