For the 12 months ended March 31, 2018, assisted and independent living average prices fell, while skilled nursing stayed the same as in 2017.
After a record 2017 for assisted living average prices, for the trailing 12 months ended March 31, the prices have come down to earth, a bit. In this most recent period, the average price per unit fell 5% from calendar year 2017, to $210,100 per unit, and the unweighted average cap rate rose to 7.9% from 7.6%. This makes sense given rising interest rates and the continued market headwinds.
The independent living market dropped by 9%, to $209,300 per unit, for the 12 months ended March 31, but I would assign less meaning to that because it is a much thinner market than assisted living with outlier deals having a larger impact. But the average IL cap rate rose 40 basis points to 7.4%.
The skilled nursing market, however, appears to have settled into a “new normal,” as the $81,000 average price per bed was almost identical to the 2017 average, as was the cap rate at 12.2%. Unless there are major changes in the next year or two, we just do not see the average price getting back up to that nearly $100,000 per bed level in 2016 anytime soon.
