There is no question that nursing facilities were the hardest hit during the pandemic, both in the media and with a significant drop in census. Yet, providers and investors continued to buy, albeit usually at lower average prices. The sector’s reputation took a huge hit, and the talk about home health and other models grew to replace the standard nursing facility model with semi-private rooms.

But most of those models are more costly, and the funds simply are not there in the state and federal budgets. The skilled nursing sector has long been the low-cost producer in senior care, and with rising acuity levels, assisted living usually can’t replace it. And home health only works for the lowest acuity patients from a cost perspective. Providers know this, as do investors, but did the buyer field change as a result of the pandemic? With 12% to 13% cap rates, which are double seniors housing cap rates, have investors opened the spigot for this high-return market? And at what prices are they willing to come in?