SNF Prices Drop as Investment Activity, Occupancy Increases

Following two challenging years that saw occupancy rates plummet and left operators scrambling to adapt, the senior housing market is making an impressive comeback. According to a leadership panel held by the National Investment Center for Seniors Housing & Care (NIC), the assisted living market is primed for recovery, and occupancy rates are on the rise. In fact, industry advisors predict a good year ahead as occupancy is up and operating margins continue to recover. As we discussed in a previous blog, the current ‘buying boom’ is good news for investors. 
There are numerous factors contributing to this upward trend, especially because the assisted living average price per unit remains low as occupancy rises. McKnight notes that occupancy is recovering across senior living, but faster in assisted living than independent living. Furthermore, this is the first time occupancy rates either remained the same or increased. 

Average Price Per Unit Drops 

In 2019, the average price per unit of assisted living facilities was $248,400. In 2020, this number dropped to $174,700 per unit, a 30% decrease. While all types of senior housing facilities experienced a drop in price during the pandemic, assisted living experienced the biggest change. Given these numbers and the current market trends, it’s no wonder investment opportunities are everywhere. According to a recent U.S. Seniors Housing & Care Investor survey, the following are the hottest categories for investors:
  • Active adult 
  • Assisted living 
  • Independent living 
  • Memory care 
  • Nursing care 

Memory care and skilled nursing can be extremely complex housing communities. In 2021, investors paid $93,000 per bed for SNF facilities on average. While this number is higher than it was in 2020, it remains below the average price for 2019. 
We know the demand for senior housing fell across the board during the pandemic, but the future is very promising as the industry continues to recover. However, SNFs continue to face hurdles as staff shortages persist and the cost of care is rising. We expect prices to remain competitive, making the market attractive for both sellers and investors. Curious about our current listings? Check out our inventory and contact a Sherman & Roylance team member for more information.