Skilled Nursing Facility Prices Soar to New Record While Assisted Living Just Beats Last Year’s Record According to New Acquisition Report from Irving Levin Associates, Inc

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NORWALK, Conn.–(BUSINESS WIRE)–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 area in the senior care spectrum that witnessed a decline in
average acquisition values was in the independent living community
acquisition market, which is much smaller than both assisted living and
skilled nursing. But that decline had more to do with an unusual
increase in values the prior year based on an increase in higher quality
portfolios and properties sold. All of the market statistics will appear
in a soon-to-be published study from Irving Levin Associates, The
Senior Care Acquisition Report
, 21st Edition, 2016.

A combination of abundant capital, low interest rates and continued
investor demand resulted in one of the most active acquisition markets
ever seen. In 2015, there were 357 publicly announced acquisitions in
the senior care property market, representing an 18% increase over 2014,
which was a record year itself. Despite this large increase in
transactions, the dollar value of the 357 acquisitions totaled just
$14.2 billion, or 44% lower than in 2014. The big difference between the
two years, and what was driving the decline in total dollar value, was
the near absence of billion-dollar transactions in 2015. There was just
one in 2015 for only $1.125 billion compared with five in 2014 totaling
approximately $9.7 billion in senior care assets. “We knew some records
were going to be broken, but the record number of individual
transactions in 2015 demonstrates how strong investor demand continues
to be for senior care properties,” stated Stephen M. Monroe, Editor of
the Report. “The real surprise was how much the average price for
nursing facilities increased in a year when public company stock values
fared so poorly,” Monroe continued.

Average skilled nursing cap rates dropped to 12.2%, just 10 basis points
above their record low, and assisted living cap rates stayed the same as
in 2014 at 7.7%. Average independent living cap rates hit a record low
of 6.96% despite the average price per unit dropping in 2015 from the
record set in 2014. “The combination of lower cap rates, plus the higher
cash flow per unit and bed sold, all contributed to the high average
prices in 2015,” commented Monroe.

The Senior Care Acquisition Report, 21st Edition, 2016 contains
statistics on the skilled nursing facility, assisted living and
retirement housing merger and acquisition markets in more than 70 charts
and graphs, including prices per bed or unit, capitalization rates and
income multiples, in more than 300 pages. The Report also includes
transaction information on each of the 357 publicly announced seniors
housing and care acquisitions in 2015 (a new record), plus the publicly
announced home health care and hospice acquisitions in 2015. The
Senior Care Acquisition Report
, 21st Edition, 2016 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 M&A markets.

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Irving Levin Associates
Stephen M. Monroe, Partner
(203) 846-6800
Fax: (203) 846-8300