We’ve written about the bifurcation in the skilled nursing market between the traditional SNFs, which tend to be older, feature smaller, semi-private rooms and heavily rely on Medicaid revenues, and the new transitional care facilities, which cater almost exclusively to the Medicare and private pay patients. These feature large private rooms and come with many of the bells and whistles of modern senior living communities.
Not surprisingly, these newer properties are developed and sold at much higher values than the traditional SNFs. Indeed, according to our recently-published Skilled Nursing Acquisition & Investment Report, facilities built in the last 20 years (which would include almost all transitional care facilities, plus some traditional SNFs) sold on average for $109,900 per bed, compared with facilities built between 20 and 40 years ago ($88,100 per bed) and the oldest cohort built over 40 years ago, at $76,100 per bed.
Highlighting this difference was the recent announcement of a brand-new transitional care facility that just opened in Webster, Texas (Houston MSA), which was developed at a cost of $20 million, or $285,700 per bed. That’s higher than the industry average we calculated of $191,200 per bed for new skilled nursing facilities, based on our in-house database of new construction projects going back to January 2013. And just imagine the price when the operations start humming.
Bridgemoor Transitional Care developed the facility, its fourth overall with locations in Round Rock, Fort Worth and San Antonio, Texas. At the Webster location, they offer physical, occupational and speech rehabilitation, an in-house pharmacy dispensing system, dialysis coordination and other clinical support services, not to mention a number of dining options and amenities. Plus, all the 70 rooms are private, which certainly helps attract those Medicare and private pay dollars.
