The average price-per-bed for assisted living rose more than 45% in 2011 to $156,900 per unit, compared to the previous year, reports Irving Levin Associates, Inc.
Prices came “extremely close” to 2007’s peak, and showed the value of the seniors housing market despite economic uncertainty.
“The seniors housing market was so resilient during the Great Recession that investors were willing to pay higher prices for the higher quality assisted living communities that came on the market in the past year,” says Irving Levin.
While assisted living saw the greatest increase in per-unit pricing, independent living came in with the “most valuable beds,” increasing 17% to an average price of $171,000 per unit, also close to the record set in 2007, says Irving Levin.
“Even though the housing market has not improved much to help seniors sell their homes at reasonable prices, high quality seniors communities were in demand in the market, especially those with an assisted living or memory care component,” said Stephen Monroe, editor of the Irving Levin M&A report.
Skilled nursing didn’t fare so well in 2011, with the average price per bed dropping about 18% to $51,100, according to Irving Levin’s The Senior Care Acquisition Report.
“While this decline looks significant, it is very much in line with the average prices paid in the four years from 2006 through 2009,” said Monroe. “Last year was an unusual year for the skilled nursing industry because it had to deal with a short-term period of higher Medicare rates that were then drastically cut effective October 1, 2011. No one likes uncertainty, but skilled nursing providers are adapting well to the changes and there is no shortage of buyers or M&A activity.”
Written by Alyssa Gerace