Seniors Housing Weekly Update - Skilled Nursing M&A In 2015
April 21, 2015
April 21, 2015. 60 Seconds with Steve Monroe. After the record-setting valuations in 2014, the skilled nursing acquisition market is already off to a strong start...
Skilled Nursing M&A In 2015
After the skilled nursing market hit a record for the average price per bed for the second year in a row last year, I wasn’t too sure what to expect for 2015. So far, I have not been disappointed, as buying interest continues to be relatively strong, especially at the higher price points. In 2014, there were 19 transactions with a price above $100,000 per bed. So far this year, there have been four sales with a range between $132,000 and $189,000 per bed. On the lower end of the scale, there have been just three transactions below $40,000 per bed, which either means the demand for these facilities is at a low, or lower quality nursing facilities are selling at higher prices because the demand in general has been strengthening. CMS has proposed a 1.4% net increase in Medicare payments to SNFs for fiscal year 2016, which is a little higher than some analysts expected. That is good news for providers, and buyers, and should provide some short-term stability, until managed care sinks its teeth in deeper.