Sales Transactions Volume and Pricing of Combined and Freestanding Assisted Living Properties
Through 3Q11, rolling four-quarter seniors housing sales transactions volume totaled $14.0B, with assisted living comprising most of the volume at $10.6B. Within assisted living, the solid majority of the transaction volume has been in combined assisted living (combined) properties at $7.6B, with the remaining $3.0B in freestanding assisted living (freestanding) properties.
While transactions volume have recorded record levels, pricing for assisted living properties has not yet recovered from levels observed prior to the financial crisis. As of 3Q11, the rolling four-quarter price per unit (PPU) for all assisted living properties was $149.9K. Combined properties held a price premium over freestanding properties during 3Q11, as rolling four-quarter PPU in combined properties was $168.2K compared to $125.2K for freestanding properties. While there was a 34% premium for combined properties this quarter, during the prior 18 months, pricing levels had been essentially the same between campus types.
Market fundamentals have a tendency to vary in regard to the absolute level, as combined properties maintain on average lower occupancy and higher rent levels than do freestanding properties, even though the movement in those metrics over time has generally been highly correlated between the two campus types.
As of 3Q11, combined properties had an occupancy rate of 88.1%, while freestanding properties had an occupancy rate of 89.3%. Occupancy rates of combined and freestanding properties have generally trended parallel to each other, with the average differential at 130 basis points during the past six years.
Average monthly rates for combined and freestanding properties also exhibit parallel trending over time, with combined properties trending on average $675 higher than freestanding properties during the past six years. As of 3Q11, average monthly rate for combined properties was $3,845, while freestanding properties had an average monthly rate of $3,218. Furthermore, trends in annual rent growth between the two campus types have been nearly indistinguishable from one another.
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IN THIS ISSUE
Sales Transactions Volume and Pricing of Combined and Freestanding Assisted Living Properties
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Southeast Market Briefing
Date:
Sunday, March 25
Time:
11:30 a.m. - 1:30 p.m.
Location:
Boca Raton Resort & Club
501 East Camino Real
Boca Raton, FL 33432
Co-located with the 2012 NIC Seniors Housing Regional Symposium & Skilled Nursing Investment Forum
For more information visit www.nicseniorshousing.org.
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Next Data Release:
4Q11 - January 26, 2012
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