NORWALK, Conn.--(BUSINESS WIRE)--The seniors housing and care M&A market is in its fifth year of a bull market, as evidenced by the trend in average prices across the spectrum. For the 12 months ending September 30, 2014, the average price paid per unit for combined independent and assisted living communities and for stand-alone assisted living communities has grown significantly compared to the 2013 Calendar Year, according to a supplemental quarterly report for The 2014 Senior Care Acquisition Report, which is published by Irving Levin Associates.
The average price per unit for each type of senior care increased since the previous year, up 30.5% from $150,600 to $196,600 per unit for assisted living, up 28.8% from $164,000 to $211,300 per unit for independent/assisted living and up 7.0% from $73,300 to $78,400 per bed for skilled nursing. What largely drove the increase in skilled nursing prices was the growing number of over-$100,000 per bed SNF acquisitions the past two years, which has gone from just five in 2012 to 12 in 2013, and 11 so far in the first three quarters of 2014. “Buyers are positioning themselves for the changing post-acute care market by purchasing those skilled nursing facilities with the most potential to increase their subacute census and drive managed care business,” stated Stephen M. Monroe, Editor of the Report. With regard to the private pay seniors housing market, “the market for high-quality senior living properties today is stronger than what it was at the peak of the last bull market in 2006-07,” Monroe explained.
Capitalization rates also decreased significantly for each segment of the senior care M&A market since 2013. For the four quarters ended September 30, 2014, assisted living cap rates were down 70 basis points from 8.7% to 8.0%, they were down 60 basis points from 8.5% to 7.9% for independent/assisted living and down 70 basis points from 13.0% to 12.3% for skilled nursing. The availability of equity and cheap debt, plus an influx of new buyers, has been driving prices up and cap rates down in a seniors housing bull market that is seeing more M&A transactions than ever before.
The 2014 Senior Care Acquisition Report, Nineteenth Edition, contains statistics on the skilled nursing facility, assisted living and retirement housing merger and acquisition market, including prices per bed or unit, capitalization rates and income multiples, in more than 200 pages. The report also includes transaction information on each of the 225 publicly announced seniors housing and care acquisitions in 2013 (a new record), plus the publicly announced home health care and hospice acquisitions in 2013. The 2014 Senior Care Acquisition Report, Nineteenth Edition, may be purchased for $595. For more information, or to order the report, call 800-248-1668. Irving Levin Associates, Inc. was established in 1948 and has headquarters in Norwalk, Connecticut. The company publishes research reports and newsletters, and maintains databases on the health care and senior housing markets.
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