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 »
The 55+ Active Adult Market: The New Frontier of Seniors Housing
Judging by the number of questions we got during our May 16th webinar called “The 55+ Active Adult Market: The New Frontier of Seniors Housing,” it is safe to say that there is plenty of interest in this growing market. Our listeners tuned in to find out what prices active adult communities have been trading at, their cap rates, and what exactly operationally goes into this no-care and low-services senior living option. You can still listen here. Our Editor, Steve Monroe, and several experts that included Ryan Maconachy of Newmark Knight Frank, Ryan Frederick of SmartLiving 360 and Michael Hartman of Capitol Seniors Housing made up our panel, bringing in different perspectives on how to... Read More »
Pricing Age in Skilled Nursing Facilities
There are plenty of issues that come along with the aging of the skilled nursing facility inventory. Older facilities require more capex to keep operations up to snuff, have trouble attracting the coveted Medicare and private insurance patients, and often have far fewer private units but more three- or four-bed wards. In addition, it has to be more difficult attracting and retaining staff at an older facility, especially when a newer facility often comes with more bells and whistles in addition to newer technology that makes those employees’ jobs easier. Where would you rather work? So, in the M&A market, how did those older facilities fare compare with the newer ones? Well, there was... Read More »
Another Valuation Metric for the 2018 Seniors Housing M&A Market
In a year when both the assisted living and independent living average cap rates rose, how did the sectors’ average Gross Income Multiples (GIM) change year over year? Well, they accordingly fell off their 2017 levels, mirroring their changes in cap rate, according to The Seniors Housing Acquisition & Investment Report. The average independent living GIM fell to its lowest point in five years at 5.0x, while the assisted living GIM dropped 70 basis points to 3.2x, also a five-year low. The difference between the sectors can be explained by the higher risk of owning assisted living communities. The IL market, on the other hand, has seen far less new construction and more stable occupancy... Read More »
How Did Buyers Value Cash Flow in Seniors Housing M&A in 2018?
For the seventh year in a row, there was a perfect correlation between the age of seniors housing communities sold and their average net operating income per unit, according to the Seniors Housing Acquisition & Investment Report. This makes sense, given that the newer communities should better reflect the current demand (by unit size, amenities, etc.) and require less capex to maintain their competitiveness. Newer communities also have an easier time attracting good staff and charging higher rents. Those newest communities (built after 2013) had an average of $19,700 per unit of NOI, relatively consistent with recent levels. The next subset of properties built between five and 10 years... Read More »Schedule a demo
Gain access to the best healthcare and long-term care investment intelligence, data, and analysis.
