Age before beauty
There was a complete flip-flop in the percentage of skilled nursing facilities sold by age, with the oldest category (greater than 40 years old) increasing to 52% of the properties sold in 2015, compared with just 22% in 2014 (according to the 21st Senior Care Acquisition Report, released last month). Several of these properties, however, sold for more than $100,000 per bed, indicating their location or profitability overcame the issue of their old age. But, if we saw a massive increase in the number of sales of 40-year old SNFs (or older), then what drove the market to its all-time record high average price of $85,900 per bed? It was an increase in the number of facilities sold that were... Read More »
Regional seniors housing prices stick with tradition
Last week, we wrote of a big shake-up in the regional average prices per bed for skilled nursing facilities, with the North Central region supplanting the Western and Northeast regions for the top spot, in terms of average price paid according to the recently published 21st Senior Care Acquisition Report. The seniors housing (including independent and assisted living) side, however, largely followed tradition. Once again, the Northeast region topped the charts (for the sixth year in a row) with an average price per unit of $201,100, despite it dropping 29% from the previous year’s average if $281,700 per unit. That is not surprising given the region’s high land values and construction... Read More »
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 »Schedule a demo
Gain access to the best healthcare and long-term care investment intelligence, data, and analysis.
