Ever since the dawn of time, sellers and buyers of Senior Living communities have locked horns over the concept of ‘upside’. What is upside? Essentially, it’s the unrealized potential of a Senior Living operation that if realized, would result in a better overall performance. This can range from occupancy / census improvements, potential for physical plant expansion, better expense controls, to rate growth or payor mix improvements and much more.
The battle between sellers and buyers as it relates to upside typically relates to how much value a seller is receiving for that unrealized potential, on top of what they have as their in-place performance. While sellers will be quick to point out the potential for their operation / community that they haven’t realized, buyers, while mostly in agreement with that potential will respond with a “yes, but that’s mine to realize, and I should be the one to benefit from value improvements should that upside be realized.” This battle regularly results in disagreements over perceived value, and the need to try to achieve common ground.
As a broker, usually exclusively engaged by sellers, it’s our job to fight for our sellers to convince the marketplace that not only is a seller’s upside attainable, but buyers should give some type of monetary credit for that upside. Our job is to get sellers the best possible deal out there, and navigating this battle between seller’s and buyer’s is often challenging…but something worth doing on behalf of our seller clients.
Please reach out to your trusted partners at SLIB if you are looking to confidentially sell your Skilled Nursing, Assisted Living, Memory Care, Independent Living or 55+ community so we can fight for the upside value of your community.
