Assisted Living prices hold steady
After the average price paid for assisted living rose from $150,600 per unit in 2013 to $188,700 per unit 2014, a 25% increase according to the 20th Edition of The Senior Care Acquisition Report, who would have expected that in these heady times in seniors housing, there would be virtually no change in the average price for the last two four-quarter cycles? Indeed, for the 12-months ending March 31, 2015, the average price per unit was $188,900 (up 0.1% from the 2014 Calendar Year), and for the 12-months ending June 30, 2015, the average price per unit was $189,500 (up 0.4% from 2014). Is this evidence enough that we have reached the top of the roller coaster? Or is demand still so strong... Read More »SNF M&A; A Market Remains Robust
With at least five transactions priced over $100,000 per bed so far this month, July may be a record for high-priced SNF sales. The skilled nursing facility M&A market continues to lead the way in terms of where the post-acute sector may be heading. So far in the past three weeks, we have seen five deals close with values ranging from just over $100,000 per bed to over $200,000 per bed. Yes, a few have been in the northeast, which can be expected, but these high-priced sales go all the way from North Carolina to Texas to California. This is not a regional phenomenon. It is a change that is going on in the sector that will be part of the evolution of who takes care of the elderly, how... Read More »Assisted Living Occupancy Declines…Again
Second quarter occupancy trends are soft again, with construction starts strong. So, are people finally beginning to believe that the development boom we have been talking about is actually starting to impact census? We are talking about assisted living and memory care, because that is where the action has been. According to the second quarter NIC MAP data, assisted living occupancy has dropped again sequentially, and is down 45 basis points from a year ago. But worse, and more to the point, trailing 12-months assisted living construction starts as a percent of existing supply has been at 4.7% and 4.8% for the past two quarters, much higher than a year ago. And, more development pipelines... Read More »More Troubles For HCP
Financial problems at the UK’s largest care provider results in a write-down by HCP. HCP just can’t get a break. While the problems with its major tenant HCR ManorCare have been in the spotlight for a while, in late June the REIT announced that it will be taking another write-down. This time it relates to a $215 million investment made three years ago in senior notes issued by Four Seasons Health Care, the largest elderly care provider in the UK with about 470 care homes. Well, it looks like Four Seasons is having financial difficulties from increased labor and corporate costs, lower occupancy from above-average winter death rates and an increase in care home embargoes. The non-cash... Read More »Impact of higher acuity patients in skilled nursing
With skilled nursing facilities on average selling for a record price per bed of $76,600 in 2014, surely the quality of the facilities sold was higher than in previous years. Probably the best measure of quality (and consequently the best explanation for the record-high prices) is the trend in average net operating income per bed. Since 2011, this figure has risen steadily, going from $6,500 per bed in 2011 to $8,950 per bed in 2014, which is a new record and 33% higher than the last peak in the skilled nursing market in 2007. Why this increased cash flow? For one, the industry is taking on higher acuity patients, with higher daily rates, and while the margins may not be expanding, the... Read More »Schedule a demo
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