Valuations of assisted living and independent living communities are reaching unprecedented heights, according to the 2015 Senior Care Acquisition Report. Growing investment demand, abundant capital, and low interest rates all contributed to record performance in 2014, according to Irving Levin Associates, publisher of the report.
Healthy numbers: The average price per unit in the assisted living market jumped by 25% in 2014 to a record $188,700 per unit. The average price per unit for independent living communities also set a new record of $246,800 per unit, or more than 28% higher than in 2013. The skilled nursing market set a record for the second year in a row, reaching $76,500 per bed, or 4% higher than in 2013, according to the report. Average assisted living cap rates dropped to a record low of 7.75%, while average independent living cap rates also hit a low of 7.4%. In the skilled nursing market, while the average cap rate fell 60 basis points to 12.4%, it did not set a record, which was last set in 2007.
So far in 2015, the strong trend is continuing. “In seniors housing, we saw a deal in 2015 valued over $500,000 per unit, two deals with prices over $400,000 per unit and a whopping 15 sold over $300,000 per unit,” Levin reports.
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