Skilled Nursing Values Stabilizing
You know us. We have always been bullish on the long-term prospects of the skilled nursing sector. You have read on these pages how investment interest never slowed even as average prices dropped in the past few years from the record peak of just over $99,000 per bed in 2016, a level that we thought was not sustainable, at least not in the short term. After two years of declines, there has been a slight turnaround. According to our rolling four quarters statistics, for the 12 months ended June 30, 2019, the average price per bed was $79,950, which is a 3.1% increase over calendar year 2018. This could just be a quirk in the numbers, as in a few higher prices in the second quarter of this... Read More »
Independent Living Values Continue Climb
Finally, after five years, independent living values appear to have returned to 2014 levels. According to the latest four-quarter period ended June 2019, the average price for independent living properties rose to $257,800 per unit, up 2.4% from the $251,800 per unit in the four quarters ended March 2019 and 8.3% from the $238,100 per unit in calendar year 2018. That level is also 4.5% higher than the previous record-high price of $246,800 per unit observed in 2014, according to the Seniors Housing Acquisition & Investment Report. Back then, many owners of high-quality, well-performing IL communities in high-barrier-to-entry markets saw high per-unit prices in the M&A market and... Read More »
Assisted Living Values Continue Rebound
Every quarter, we take a look at the latest 12-month pricing multiples for the assisted living, independent living and skilled nursing markets as an added bonus to the Senior Care Acquisition Reports. Starting with assisted living, the market appears to have rebounded after the drop in value recorded in 2018. From 2018 to the four quarters ending on June 30, 2019, the average price paid per unit rose from $186,400 to $205,900, a 10.5% increase. The jump was smaller when comparing the four quarters ended March 2019, when we recorded an average price of $204,000 per unit. That market, which includes memory care communities, suffered from the woes of overdevelopment, not only affecting... Read More »
The Risk of Being Small in Seniors Housing
Size has consistently mattered when it comes to evaluating the risk of a seniors housing community, which includes independent living, assisted living and memory care. Bigger communities are able to use scale to trim expenses, which could be huge if you have to pay your employees a little more to both compete with other seniors housing competition or businesses in other sectors. Bigger communities, which are favored by institutional owners, can also absorb the pain of a few empty units better than smaller communities. That is not to say that smaller communities, with their “home-like” atmosphere and more personalized care, don’t have their advantages too. But the smallest communities,... Read More »
Seniors Housing Prices Jump, Skilled Nursing Continues Decline
Seniors housing prices saw significant rises in average prices in the 12 months ended March 31, 2019. Assisted living itself jumped 10% from $186,400 per unit in 2018 (according to our Seniors Housing Acquisition & Investment Report) to $204,000 per unit in the latest four-quarter period. Meanwhile, independent living rose a more moderate 6% from $238,100 per unit to $251,800 per unit, the highest level ever recorded for the sector. The small size of the IL market means that a few transactions can have an outsized impact on the average, but given the healthier occupancy and lower labor costs of the IL industry today, it makes sense that these communities have become more desirable.... Read More »Schedule a demo
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