Senior Housing Prices Soared In 2014

In 2014, average per-unit prices in the assisted living market increased by 25 percent. Assisted living average unit prices hit a record $188,700 per unit and average per bed prices for nursing homes jumped 4 percent to $75,500, setting records in the industry for the second straight year. The average price for independent living communities also set a new record of $246,800 per unit, 28 percent higher than in 2013. The new prices came in a year that also saw record levels of mergers and acquisitions. In 2014, close to 300 mergers and acquisitions, representing approximately $26 billion, were announced in the senior housing market. As prices increased, cap rates, or the ratio of net operating income to property asset value, plunged last year, providing more cash flow for investments. Rates for assisted living and nursing homes also decreased.

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