We have covered the demise of the 40-year-old skilled nursing facility in articles and webinars over the past few years, and the acquisition market has taken notice. In 2015, 52% of the properties sold were 40 years old and older, which made sense since nearly half the entire U.S. inventory of SNFs are this old. By 2016, however, 52% of the properties sold were between 20 and 40 years old, which in many cases are considered to be relatively “new.” This helps explain why the average and median price per bed jumped so much in 2016. The percentage in the newest category (less than 20 years old) remained relatively similar from 2015 (22%) to 2016 (20%).
With the newer skilled nursing facilities pushing the average price per bed higher and higher over the past several years, one would expect that these new properties would have the highest average prices per bed. In 2015, there was a perfect correlation between age and average price, with those facilities over 40 years old selling at the lowest average price of $59,900 per bed, moving to $74,500 per bed between 20 and 40 years old and $127,350 per bed for those facilities under 20 years old.
This changed dramatically in 2016, as the newer facilities sold for an average of $119,300 per bed, while those that were between 20 and 40 years old sold for an almost identical average of $119,200 per bed. The oldest facilities were almost 50% lower in price, coming in at $66,000 per bed. We believe this was higher than in 2015 because the entire market seemed to shift upwards.
