While the skilled nursing sector will continue to experience a recovery in occupancy well beyond this year, the average selling price of facilities per bed is the highest since 2016.
Nursing assets traded at an average selling price of $ 90,700 per bed, outlook report shows published by Calabasas, California-based real estate brokerage firm Marcus & Millichap. The report monitors data from March 2020 to March 2021.
Small properties trade more frequently, the report says, and vaccination efforts coupled with pent-up move demand will help lower investors’ risk tolerance in the area.
Private investors accounted for 90% of purchases, favoring “sunbelt markets,” Marcus & Millichap research associate Benjamin Kunde said in the report.
Trade in Florida has doubled on an annual basis; transactions within the state accounted for 25% of domestic market flows.
Real estate investment trusts (REITs) and institutions become more active in mid-2021 after suspending acquisitions early in the new year, according to preliminary data.
The areas with the tightest closures – namely the Pacific and Northeast regions of the country – have seen the “sharpest contractions” in census figures. The stabilized national occupancy rate fell 1,270 basis points year-on-year.
Despite the slowdown in the census, average daily occupancy rates are increasing. The Pacific market led this trend with a 2.8% year-over-year increase, supported by government reimbursement programs and federal stimulus funds. The Great Plains region follows with 2.3% and 1.6% in the Mid-Atlantic.
SNF beds decreased by 2,060 during the period studied by Marcus and Millichap. About 1,600 beds were under construction at the end of the first fiscal quarter of this year.
The stock of beds is well below the quarterly average: “The depletion of the national stock has continued for most of the last decade, including an acceleration in 2018 before the challenges of the health crisis,” added Kunde . “As the baby boomer generation passes the age of 75, the demand for beds will increase. “