The skilled nursing market has been going through many changes in recent years as it adapts to new reimbursement policies, shorter lengths of stay and more medically-complex patients. But did all of that affect what buyers will pay for size in 2018? Well, according to the 2019 Skilled Nursing Acquisition & Investment Report (available soon), there was a perfect correlation between size of nursing facility sold and the average price per bed for the second year in a row. Historically, larger facilities have commanded the higher prices because of their ability to scale, lower the per patient costs and fill beds with Medicaid patients at will. However, those advantages may soon backfire because of shortening lengths of stay, the impact of Medicare Advantage, but maybe most importantly, rising labor demand and costs. But for now, bigger facilities still command a premium over all others, averaging $102,050 per bed for facilities with 180 beds or more.

The smaller the facility, the tougher it is to absorb the higher costs (fixed and variable) of skilled nursing care, especially compared with lower levels of senior care like memory care or assisted living. So, those facilities with between 80 and 119 beds, and those with fewer than 80 beds sold on average far below average, at $58,950 per bed and $51,300 per bed, respectively. Following a theme of this year, two ends of the market grew further apart, with the middle groups of facilities growing closer to the extremes. Both the largest and the smallest facilities stayed relatively static in average price per bed year over year, but facilities with 80 to 119 beds fell 19% in price while those with 120 to 179 beds increased 10%.