Go Big Or Go Small In Seniors Housing?
Did size matter when it came to pricing a seniors housing (independent living and assisted living) community? Yes, it did, as the difference in average cap rates from the smallest communities (under 50 units) and the larger communities (90 units and above) grew to its widest gulf ever recorded (back to 2003) at 180 basis points, tying 2015’s difference, according to the 23rd Edition of The Senior Care Acquisition Report. Generally speaking, the smaller the community, the fewer economies of scale and the harder it is to generate significant cash flow, especially since the loss of one or two residents can have a more significant impact on the bottom line. Larger communities, including most... Read More »
Weighting the Seniors Housing Cap Rate By Units
The average seniors housing (independent living and assisted living, combined) cap rate resumed its downward trend that began after the Great Recession and strayed only one year (in 2016), hitting a new record low too, at 7.5%, according to the 23rd Edition of The Senior Care Acquisition Report. However, when weighted by units, the average seniors housing cap rate dropped even more significantly year over year, from 7.1% in 2015 (the previous record-low) to 6.6% in 2017, which was a full 90 basis points lower than the unweighted average for the year. What has changed year over year to merit such a drop? As always it comes down to the quality of properties sold during the year, with 2017... Read More »
Pricing “A” vs. “B” Seniors Housing Properties
On Thursday April 12, 2018, we hosted a webinar titled “Pricing “A” vs. “B” Seniors Housing Properties,” where moderator Steve Monroe and panelists Richard Swartz of Cushman & Wakefield, Wayne Kaplan of Premier Senior Living Group and Paul Froning of Focus Healthcare Partners spent 90 minutes detailing the ins and outs of investing in these two very different markets. The panel discussed current pricing of seniors housing properties (broken out between “A” and “B” properties), operating statistics (like occupancy, operating margin and NOI per unit) and cap rates. But they also covered who is buying “A” and “B” properties, and who is selling them, in addition to the risks and rewards of... Read More »
What to Pay for a Stabilized Assisted Living Community
Buyers are increasingly prizing stabilized assisted living communities (with stabilized defined as having an occupancy equal to or higher than 85%) over non-stabilized communities when making acquisitions. The gap between the two property types continued to widen in 2017, growing from $87,200 per unit in 2016 ($147,700 per unit for non-stabilized properties and $234,900 per unit for stabilized properties) to $128,500 per unit in 2017 ($126,200 per unit for non-stabilized and $254,700 per unit for stabilized), according to the 23rd Edition of The Senior Care Acquisition Report. The widening gulf continues a consistent theme in 2017 of investors continuing to pay up for quality and existing... Read More »
Paying For Stabilized Versus Non-Stabilized SNFs
Given the continual decline in census for the nation’s nursing facilities, it is no longer clear where “stabilized” is in today’s market, especially as lengths of stay have shortened. For your reference, we have traditionally defined stabilized occupancy for skilled nursing facilities as 85% and higher. With that said, nursing facilities with stabilized occupancy declined in value from an average of $114,700 per bed in 2016 to $93,700 per bed in 2017, according to the 23rd Edition of The Senior Care Acquisition Report. This makes sense given the overall deterioration of the market in 2017. For non-stabilized nursing facilities, the reverse occurred. While it might... Read More »Schedule a demo
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