June 22, 2018, Ben Swett, Senior Care Investor - There was a perfect correlation between the size of a skilled nursing facility sold and the average price per bed in 2017. In general, the smaller the nursing facility, the lower the sale's price, and the larger the facility, the higher the sale's price.
In 2016, the correlation existed except average prices declined for those facilities over 180 beds in size, according to the 23rd Edition of The Senior Care Acquisition Report.
In today’s market those nursing facilities with fewer than 80 beds usually command the lowest average price. In 2017, that average price was just $53,750 per bed, down 13.5% from 2016. There was a significant percentage jump in average price for those facilities with between 80 and 119 beds.
That average price was $73,250, or a 36% increase from 2016. Unexpectedly, there was a 25% jump in the average price per bed going to the 180 beds and larger category, to $102,150 per bed.
That has happened every several years, and usually it is the result of a few large sales at very high prices, since the market for nursing facilities of that size is usually small, especially in today’s market with chronic labor shortages.