Across the senior housing and care spectrum, average per-unit and per-bed prices softened a little in the four quarters ended September 30, 2017.
I am sure a lot of you have heard that the senior housing acquisition market is soft, reflecting concerns over census and rising costs. But how soft? Not very, according to our recent acquisition data. For the four quarters ended September 30, the average price per unit for assisted living did drop compared with the four quarters ended June 30, but by only 4% to $208,200. It is still higher than the $193,650 per unit for calendar year 2016. The average AL cap rate dropped to 7.9%.
The independent living market softened a little as well, with the average price per unit falling by 2% to $218,400 for the four quarters ended September 30, and still lower than the $228,200 per unit in 2016. Surprisingly, the average IL cap rate jumped from 6.9% to 7.5% sequentially,
In the skilled nursing sector, the average price per bed for the four quarters ended September 30 fell by less than 1% sequentially to $97,200, compared with $99,200 per bed in 2016. The average cap rate jumped by 40 basis points sequentially to 12.3%, very close to the 12.2% cap rate in 2016.
When the fourth quarter transactions take effect, I am sure there will be some bigger changes to come.