Cap rates are low, values are high, but the mix of buyers and sellers in the assisted living acquisition market is changing. How will that impact values going forward?
The assisted living acquisition market has been vibrant for the past several years, with demand so high for some properties even the brokers representing the sellers have been surprised on occasion. But something has changed since last year, and there is some disagreement over whether we have reached a peak in the market, or not. A lot of that hinges on what happens to cap rates, and that will be influenced by what the Federal Reserve does. It is now looking like a rate hike may not be coming until next year. If that’s the case, will cap rates drop further? Or, is there really no more room to decline given that the healthcare component of assisted living continues to increase. Residents are entering at an older age and much more frail than 10 years ago. Are buildings that were designed and developed 20 years ago really capable of handling the elderly who need assistance not with one or two ADLs, but four or five? If you want to find out what is really happening in the assisted living M&A market, where values are going and why, who is buying and who is selling, and why, join me tomorrow on our live webinar, Assisted Living M&A: Buying, Selling and Valuing. We have a great panel to cover all these topics and more. See you then.
