What is the optimum size for a Seniors Housing Community sale? – By Jason Punzel
Many owners ask us, “What is the optimum size for a Seniors Housing Community sale?”. We have found there is no optimum size for a senior housing community. Different sizes will attract different types of buyers. A REIT or large private equity company will not have an interest in a single, 16 unit assisted living community. Likewise, a local nurse typically will not have the financial ability to buy a 100 unit assisted living community.
As a company, we have found that most larger Buyers have a minimum threshold of 40 units for an assisted community and 80 units for an independent living community. However, the preference is typically 80+ units for assisted and 100+ for independent. As there are more financially qualified buyers seeking larger communities, cap rates tend to be lower and the price per unit higher, than with smaller communities.
However, there are exceptions to every rule. If there are multiple smaller facilities (15-25 units) on the same parcel, or nearby, often times larger buyers are still interested. We have also had a lot of success selling smaller communities (25-40+ units) that are in favorable locations in larger cities, newer, and specialize in higher end private pay residents who prefer a smaller setting. Recently, we closed on a newer 40-unit memory care community in a California Coastal community that sold for over $450,000/unit. It was 100% private pay with high occupancy and excellent quality finishes. Since there are so many variables that factor into a purchase decision by any Buyer, it is important to work with an expert in valuing and selling a senior living community to ensure the optimal pricing and terms.
For more information on what your senior living community could be worth, please contact Jason Punzel at firstname.lastname@example.org or 630-858-2501 x 233.