Seniors Housing FAQs

What is the optimum size of Senior Housing Facilities?

• Independent living facilities 100+ units
• Assisted living facilities 80+ units Memory care facilities 50+ beds
• Skilled nursing facilities 100+ beds
• Rehabilitation nursing facilities 50+ beds

What are the benefits of a greater number of units/beds and care levels?

• Economies of scale
• Opportunities for continuum of care resident/patient retention
• Increased penetration into the market with marketing efforts

What is a typical operating expense ratio for Senior Housing Facilities?

• Independent living facilities 50 to 60%
• Assisted living facilities 55 to 70%
• Memory care facilities 60 to 75%
• Skilled nursing facilities 80 to 90%
• Rehabilitation nursing facilities 75 to 85%

What causes a facility to fall outside of the typical range of operating expenses?

• Size of operation – larger facilities often have a lower expense ratio
• Quality of management
• Longevity of staff
• Local cost factors
• Changes in government reimbursement (if applicable)

 
What to do if your property is under performing ?

• Increase occupancy
• Improve marketing and community outreach
• Improve appearance of the improvements
• Improve the quality of patient/resident care
• Increase revenue
• Do competitive analysis and increase rates if appropriate
• Be certain to assess current residents/patients care needs
• Move residents/patients to appropriate level of care
• Use reserves for replacement for upgrading the facility
• Increase occupancy
• Decrease expenses
• Compare wage and salary structure to the market and competitors
• Compare staffing levels to the market and competitors
• Implement a strict budget and dictate adherence to the budget
• Review property assessment – some assessed values are declining
• Compare management fee to the market rates

How is the price calculated based on the data you provide?

• A regression analysis is applied to the data you input and is based on data from sales of stabilized properties
• The result is representative of the data input and an actual offering price must be adjusted for various market factors

What factors alter Senior Housing values?

• Age of the improvements
• Care level provided
• Stability of the revenue
• Changes in census mix
• Trailing 12 months NOI (EBITDAR) compared to estimate for next 12 months
• Potential for changes in government reirubursement rates
• Management
• Supply and demand