Pricing Premium for Senior Living Portfolios vs. Single Asset Sales – By Jason Punzel
As a company, SLIB did a total of 60 transactions in 2019, and it was a mix of portfolio and single asset sales. Often times we get asked the question “Is there a pricing premium for senior living portfolios vs. single asset sales?” In general, the answer is “yes”. However, it depends on the size of the single asset vs. the size of the portfolio, the location of the portfolio and the make-up of the portfolio.
In general, portfolios are more attractive to buyers if they are in the same general geographic location, are similar in size and quality and are either all seniors housing or skilled nursing. A portfolio that is more homogeneous makes it easier to manage, efficiencies and economies of scale can be easier to obtain, and it will fit the acquisition criteria of a buyer better.
When comparing prices of an individual asset vs. similar assets that are in a portfolio of multiple assets we typically see a premium of 5-10% for a homogeneous portfolio. A portfolio allows a buyer to deploy more capital at once, achieve greater economies of scale, enter a new geographic location more easily, and often allows for more attractive financing terms.
Conclusion:
Whether you own one community or several, the first step in determining value is to engage an experienced professional to assist in the valuation and analysis of your property/properties.
For more information about the value of your senior living communities, please contact Jason Punzel at 630-858-2501 x 233 or punzel@slibinc.com.
