Operators know from experience that the delivery of high quality care to residents usually leads to robust referrals and strong occupancies. Reputations count. And investors understand that properties with a focus on quality care typically generate solid cash flows and high returns.
Investor interest in the seniors housing and care sector is strong. Transactions are near peak levels in terms of both dollar volumes and the number of deals closing. Over the past four quarters, 554 deals closed, a near-record pace and equal to $23.4 billion of transactions. Strong demand is pressuring prices higher, with per-unit pricing averaging $173,000 for seniors housing and $73,000 for skilled nursing on a four-quarter moving average basis in the second quarter of 2015. Prices for seniors housing have never been so high.