According to the 23rd Edition of The Senior Care Acquisition Report, the average price paid per unit rose for all size groupings of seniors housing communities sold in 2017, which includes independent living and assisted living properties. Once again, the larger seniors housing communities commanded the higher prices (averaging $260,100 per unit), as these institutional properties can take advantage of scale to increase cash flow, and thus value. The smallest properties accounted for the smallest average price per unit, at $167,300, and are typically made up of smaller, “B” properties. However, this grouping also includes boutique memory care communities that, while small, charge more for their “home-like” atmosphere and more personalized care, and as a result post higher prices.
There wasn’t a perfect correlation between property size and price in 2017, however, as properties with 50-99 units sold for $237,600 per unit on average compared with properties with 100-149 units which sold for a lower $211,800 per unit. Anecdotally, we have heard from operators that the ideal size for assisted living/memory care communities is around 90 units. Since those communities played a major role in the seniors housing sector’s rise in price (up 27% to $208,200 per unit, on average), it makes sense that the size grouping was highly valued.