As prices fall, IL cap rates stay
The average price per unit for independent living had the most dramatic change of the other acuity classes (a 13% drop from 2014 to the 12-months ending June 30, 2015, compared to a 0.4% increase for assisted living and a 3% drop for skilled nursing in the same time period), so one would expect some move in average cap rate, presumably a move up. But, the average IL cap rate for the 12-months ending June 30 did not budge from its 2014 level of 7.4%. Perhaps the quality of IL transactions hasn’t changed, with owners of high-quality communities still tempted by the high valuations, but there just have not been as many of those ultra-high end sales this year. Read More »Average SNF prices fall
Prices continue to drop off from their record highs seen in 2014. As with independent living, the same holds true for skilled nursing, which fell 3% from $76,600 per bed in 2014 to $74,100 in the 12-months ending June 30, 2015, according to a supplemental report to The Senior Care Acquisition Report. Still, skilled nursing prices have risen significantly since 2011 (when the average price paid was $51,100 per bed), and have seemingly plateaued at around $75,000 per bed. With SNFs taking on higher acuity (thus higher paying) patients while also trying to increase Medicare census, the average facility value will most likely not come close to those 2011 levels again. Read More »Average price for IL communities falls
How low can average independent living prices go? When the 2014 seniors housing M&A market hit unprecedented heights, in both value and volume, it was driven largely by an especially pricey independent living market, with the average price paid for independent living at $246,800 per unit, compared to $191,950 per unit in 2013. However, in the 12-months ending June 30, 2015 (according to a supplemental report to the 20th Edition of The Senior Care Acquisition Report), the average IL price fell to $214,500 per unit. What can explain this 13% drop? Either sales so far in 2015 have not reached the values seen in 2014, or many of the high-priced transactions of 2014 happened in the first... Read More »Assisted Living prices hold steady
After the average price paid for assisted living rose from $150,600 per unit in 2013 to $188,700 per unit 2014, a 25% increase according to the 20th Edition of The Senior Care Acquisition Report, who would have expected that in these heady times in seniors housing, there would be virtually no change in the average price for the last two four-quarter cycles? Indeed, for the 12-months ending March 31, 2015, the average price per unit was $188,900 (up 0.1% from the 2014 Calendar Year), and for the 12-months ending June 30, 2015, the average price per unit was $189,500 (up 0.4% from 2014). Is this evidence enough that we have reached the top of the roller coaster? Or is demand still so strong... Read More »How are SNFs managing costs?
With all the talk of rising acuity in skilled nursing, how are operators going to manage the resulting rise in revenues and, of course, costs? Based on SNF sales in 2014 (according to The Senior Care Acquisition Report), the average expense ratio has fallen to a five-year low of 88.2%, or 50 basis points lower than in 2013. With this significant fall coming in tandem with the rise in average price per bed paid for SNF acquisitions in 2014, it is clear that buyers will pay a premium for a facility that better manages its expenses, especially in this higher acuity, higher cost market. Read More »Schedule a demo
Gain access to the best healthcare and long-term care investment intelligence, data, and analysis.
