Where to buy (or sell) SNFs
Traditionally, the Northeast and West regions have commanded the highest average prices per bed for skilled nursing facilities because of their high real estate values and generally higher daily rates. However, the North Central region surprised us with the highest average price per bed, up from $68,400 per bed in 2014 to $100,200 per bed in 2015. This was largely driven by a few high-priced portfolio sales as well as newly built properties that always command high prices, no matter their zip code. Next came the Northeast, which increased from $88,200 per bed in 2014 to $94,100 per bed in 2015. As for the three remaining regions, there was a sharp drop-off, most significantly for the West... Read More »
Exit the extremes
While the average price per bed for skilled nursing facilities hit a record high in 2015 (at $85,900 per bed), driven largely by a record number of transactions valued above $100,000 per bed, seniors housing (assisted and independent living combined) experienced a drop in its average price per unit. After 2014 set a record with an average of $208,200 paid per unit, the average in 2015 dropped to $189,900 per unit. What drove this decrease? Well, there were fewer high-priced sales, proportionally, in 2015. The upper quartile in 2015 was $227,900 per unit, meaning that 25% of the properties sold at prices above this level. That is well off from 2014’s record-high of $250,800 per unit.... Read More »
Occupancy Down
NIC MAP reported their preliminary first quarter results for occupancy and rate trends. With the relatively mild winter, the normal first quarter downward trend was somewhat muted this year, with assisted living occupancy dropping just 29 basis points sequentially and year-over-year for stabilized properties in all markets. Trailing 12-month absorption as a percent of supply for assisted living was 3.9%, up from 3.2% in the fourth quarter and 3.0% in the year-ago quarter. And construction starts as a percent of supply dropped both sequentially and year-over-year. Most people seem to have interpreted this to mean that supply and demand are catching up to each other. Anecdotally, we continue... Read More »
Renovating the Old
We have talked about the difficulties of 40-year old nursing facilities, but 34-year old CCRCs can have similar problems. Such was the case with Kingswood Senior Living Community located in Kansas City, Missouri, which was built in 1982. Because of its age and lack of updates over the years, 40% of its IL units were obsolete, it had only 14 AL units and there were no memory care units on the campus. In addition, the current manager, Life Care Services, had difficulty filling the 82-bed skilled nursing facility. Nothing that $51.77 in tax-exempt bond financing can’t fix. With the help of LCS Development, a majority of the 80 unmarketable apartments were repurposed and converted into 30 new... Read More »
Stat of the Day
You should know by now that skilled nursing facilities set a new record for the average price per bed sold of $85,900 in 2015, shattering the record set in 2014. What was driving this increase was the large number of high-priced sales, with a record number of transactions priced above $100,000 per bed. Because of this, the upper quartile price of skilled nursing facilities last year was $123,000 per bed, meaning that 25% of the sales were at this price or higher. Meanwhile, the lower quartile was just $44,000 per bed, meaning that 25% sold at this price or lower. We suspect many of these were more than 40 years old. These and many more statistics can be found in our just released Senior... Read More »Schedule a demo
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