November 20, 2017
Jason Punzel

What is the optimum size for a Senior Living Community sale?

What is the optimum size for a Senior Living Community sale? – By Jason Punzel

When developing or buying a senior living community, owners often think about their exit strategy, and ask us, “What is the optimum size for a Senior Living Community sale?”  When selling a senior living community, there is no absolute minimum size.   However, 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 facility.  Likewise, a local nurse typically will not have the financial ability to buy a 100-unit assisted living facility.

As a company, we have found that most larger buyers have a minimum threshold of 40 units for an assisted or independent living facility, with a preference of over 60 units.   With greater demand for the larger communities, they typically sell for a greater price per unit.   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 (25-30+ 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 sold a newer 30-unit memory care community in the Portland area for over $230,000/unit and a 40-unit newer memory care community in a high-end California coastal community for $475,000/unit.

Conclusion:

Since there are 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 punzel@slibinc.com or 630-858-2501 x 233.

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