So, you have heard me preach about how strong the market is. I have been on my soap box, jumping up and down, pleading with people to think about what their nursing home or Seniors Housing community is worth. Now is the time to sell. Change is coming. I don’t think it is the kind of change that drives pricing up.
1) We know that interest rates and the cost of capital are increasing. This will inevitably lead to downward pressure on pricing.
2) Our favorite White House is now talking about accelerating Medicare cuts to skilled nursing facilities. They are looking to cut healthcare spending by $400+ billion over the next 10 years. In the budget, 2015 brings a 2.5% reduction.
My crystal ball, which is often cloudy, says that as we get closer to the implementation of these Medicare cuts, we may see a correction in pricing. My advice is to take advantage of the current market. A market that we are seeing record prices per bed/unit.
If you would like to know what your nursing home or Seniors Housing community is worth, please contact Ryan Saul at ryansaul@slibinc.com.
