2015 SNF and AL prices hit new heights
After a record-setting year across all senior care sectors in 2014, average skilled nursing facility prices soared again to a new record of $85,900 per bed, or 12% higher than in 2014. In the assisted living market, the average price paid per unit just topped the previous record set in 2014 by less than 1.0%, reaching $189,200 per unit in 2015. The only senior care sector to drop was independent living, which was coming off a particularly strong 2014 that saw a number of unusually high-valued deals. These changes came in a year that saw 357 publicly announced transactions, up 18% from 2014. Read More »Average SNF cap rate falls below 12%
Although in the four quarters ending Q3:15 the average assisted living cap rate rose slightly (5 basis points) and the average independent living fell by just 20 basis points, we saw a much bigger shift in the average skilled nursing facility cap rate, which fell 60 basis points from 12.4% in 2014 to 11.8% in the four quarters ending Q3:15. That is the lowest average SNF cap rate we have seen in any four-quarter period. Conversely, and understandably, the average price per bed for SNF transactions increased by $3,300, for a 4.3% change. So as the quality of facilities sold increases, driven largely by a higher Medicare census, or at least potential for it, and cost of borrowing remains... Read More »Independent living price continues decline
The average price per unit paid for independent living communities fell to a level not seen since the four quarters ending Q3:13. In the four-quarter period ending September 30, 2015, buyers paid on average $188,200 per unit for independent living. That is a 24% decline from the heights of the calendar year 2014, when the average price paid was $246,800 per unit. In fact, every four-quarter period since then has fallen from that mark. This sharp drop off may be explained by a decline in both portfolio sales, which typically sell for a premium, and in high quality properties, which was the biggest driver behind the 2014 record. Read More »Average AL price deflates
Have we already seen the mountaintop when it comes to the average price per unit for assisted living sales? After four straight four-quarter periods of an average AL price per unit above $188,500 (topping out at $191,300 per unit in the four quarters ending Q3:14), that average has fallen to $183,600 per unit in the four quarters ending Q3:15. Now, to put that in perspective, the next highest yearly average was in 2012 with $164,000 per unit, so we have by no means plummeted from the peak (no bubble has burst either). But what may be true is that prices may have started falling back to earth a bit, and perhaps the highest quality portfolio sales have, for the most part, already taken... Read More »Third quarter posts record M&A results
There has never been a busier third quarter for mergers and acquisitions in the history of the seniors housing and care market. In Q3:15, there were a total of 87 publicly announced transactions (including both U.S. deals and a few Canadian deals), a 23% increase over the Q2:15 and a 2% increase over Q3:14. Keep in mind that the NIC Conference began at the end of the third quarter, so we have to assume that press releases on September 30 closings were delayed. The catch is that while the number of transactions has increased, the Q3:15 dollar volume of $4.1 billion is significantly down from last year’s third quarter total of $9.7 billion, a 58% drop. For more details on the third quarter... Read More »Schedule a demo
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