SNF bed prices increased 12% last year, hitting all-time high

The average SNF price per bed was $85,900 in 2015
The average SNF price per bed was $85,900 in 2015

Skilled nursing facility prices hit record highs in 2015 with an average price of $85,900 per bed, according to a new report.

The average price per bed has increased 12% from 2014, a year which also saw record-setting price increases, Irving Levin Associates said Thursday. The firm's findings will appear in the soon-to-be-published Senior Care Acquisition Report.

The assisted living market also saw a boom in average prices, reaching $189,200 per unit in 2015. The only senior care sector that saw a price decline was the independent living community market, the report found.

The average skilled nursing cap rate, the ratio of net operating income to property asset value, fell to 12.2%, which is 10 points above the record low. The drop in cap rates, combined with a higher cash flow per bed sold, contributed to the jump in average prices, said report editor Steve Monroe.

Last year also saw one of the most active acquisition markets the senior care spectrum has ever seen, with 357 publically announced acquisitions and a 14% increase compared to 2014.

“The record number of individual transactions in 2015 demonstrates how strong investor demand continues to be for senior care properties,” Monroe said. “The real surprise was how much the average price for nursing facilities increased in a year when public company stock values fared so poorly.”