What Do The Experts (and the Audience) Say On The Labor Crisis?
On Thursday, July 13, we hosted a webinar entitled, “The Coming Labor Market Shock to Senior Care,” with panelists Glenn Barclay of Quality Senior Living, John Gonzales of SDG Senior Living and Lori Porter of the National Association of Health Care Assistants. For 90 minutes, the panel discussed how the industry will deal with a labor shortage, improving retention rates, improving onboarding and training practices, an increased minimum wage to $15 per hour in the coming years, technology’s impact on labor demands and how middle market operators will be able to deal with these changes. If you’d like to hear a recording of the webinar, click here. Needless the say, the industry has a lot of... Read More »Seniors Housing Occupancy Weakens
NIC announced their second quarter occupancy and development trends, and unfortunately it was not pretty. After a first quarter which suffered from the ubiquitous flu season census declines, we had expected, at worst, a small sequential decline in the second quarter, but perhaps a small 10 to 20 basis point uptick, maybe even better. For majority assisted living in the top 31 MSAs, for those properties open for two years (stabilized properties) average occupancy dropped 50 basis points from the first quarter to 88.9%, but down 80 basis points from the year-ago quarter. Historically, the average second quarter sequential decline is 10 basis points, and the current 50 basis point drop was... Read More »Paying Up For Square Footage In Skilled Nursing
The size of a skilled nursing facility can have important ramifications for the services they provide, especially as many facilities are engaging in higher acuity services and more frail patients. Four-bed wards and even triples became a thing of the past (mostly) more than 10 to 15 years ago. You need a lot more room to provide quality therapy programs, and with increasing demand for private rooms, or at a minimum large semi-private rooms, small facilities on a square foot per bed basis have become less desirable in the market, both for buyers as well as consumers. Most nursing facilities built today have at least 400 square feet per bed, and often much more. But in the past, many had 250... Read More »The Price of Age in Seniors Housing
Largely, the relationship between the age of a seniors housing property (including assisted and independent living) and the average price per unit is a near-perfect correlation, as the newest communities tend to sell at higher prices than the older ones. That was not the case in 2016, which saw its oldest properties jump in price and its newer ones fall, compared with 2015. Communities built earlier than 2001 (the tail-end of the assisted living building boom) sold for $179,900 per unit, up from $153,800 per unit in 2015, according to The Senior Care Acquisition Report. The anomaly of the year occurred in the group of properties built between 11 and 15 years ago, which sold on average for... Read More »
The Consistency of Skilled Nursing Facility Expense Ratios
Just like the average cap rate, the average expense ratio in the skilled nursing market for facilities sold has been very consistent. For the past five years, it has had a low of 88.2% and a high of 88.7%, for a very small 50 basis point spread, according to the 2017 Senior Care Acquisition Report. It was 88.5% in 2015 and 88.6% in 2016, just to show the consistency. Obviously, this excludes expenses such as interest, depreciation, amortization, taxes and rent. When these are all included, it is clear to see why the skilled nursing industry complains to their elected representatives as well as CMS that it is difficult to make money. And future cuts to Medicaid (as promised by both the... Read More »Schedule a demo
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