Stephen M. Monroe, Partner
Sanford B. Steever, Editor
Fax: 203-846-8300
NEW CANAAN, CT – March 4, 2003 – After rising for five straight years, the average price paid per unit for assisted living facilities plunged by more than 23% in 2002, according to a report to be published by Irving Levin Associates, Inc., a research and publishing firm that tracks mergers and acquisitions in the seniors housing and health care markets.
The average sales price paid for assisted living facilities in 2002 was approximately $65,200 per unit, according to Levin’s report, The Senior Care Acquisition Report, Eighth Edition. The average per unit sales price in 2001 was $85,500. The median price paid per unit in 2002 was $61,000, the same as in 2000 but 23% below the median price in 2001.
“The sharp decline in prices reflects the abundance of distressed properties being sold during 2002 and not a collapse of the overall assisted living market,” stated Stephen M. Monroe, editor of the report. “Lenders and financially distressed operators finally disposed of their troubled assets in a market where financing alternatives were limited for the buyers, and this resulted in the sharp drop in prices paid,” continued Mr. Monroe. More than 60% of the facilities sold in 2002 were built during the late 1990s development binge.
In the nursing home market, the average price paid per bed rose by 1% in 2002 to $38,400 per bed, despite the most difficult operating environment the industry has faced in more than 10 years. “Despite reimbursement uncertainty, especially with regard to Medicare in 2002, it is somewhat surprising that prices did not drop by at least 5% to 10% last year,” commented Mr. Monroe. “Just like in the assisted living market, the buyer market for skilled nursing facilities is dominated by smaller regional or local companies.” 
In the independent living market, the average price paid per unit decreased by almost 17% to $81,000, a level not seen since 1997. “The decline in the average price merely reflects the quality of the communities sold,” stated Mr. Monroe. “In 2002, the average occupancy rate for the properties sold was just 80%, while in 2001 almost all of the communities sold had occupancy rates of 90% or better.” 
The Senior Care Acquisition Report, Eighth Edition, contains statistics on the nursing home, assisted living and retirement housing merger and acquisition market, including prices per bed or unit, capitalization rates, income multiples and regional statistics, in more than 100 pages. It also includes transaction information on each of the publicly announced senior care, home health care and hospice acquisitions in 2002. The Senior Care Acquisition Report costs $549. For more information, or to order the report, call 800-248-1668. Irving Levin Associates, Inc. was established in 1948 and has headquarters in New Canaan, Connecticut. This privately held corporation publishes research reports and newsletters, and maintains databases on the health care and senior housing markets. 
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