Pricing Premiums for Portfolios
vs. Single Asset Sales
As a company, we value many senior living and skilled nursing
facilities both as portfolios and single asset sales. Often times we get asked the question if
there is a premium to sell a portfolio of facilities instead of an individual facility. In general, the answer is “yes”. However, it depends on the size of the single
asset vs. the size of the portfolio, the location of the portfolio and the make-up
of the portfolio.
In general, portfolios are more attractive to buyers if they
are in the same general geographic location, are similar in size and quality
and are either mostly seniors housing or mostly skilled nursing. A portfolio is easier to manage and will fit the
acquisition criteria of a buyer better when it is more homogeneous.
When comparing prices of an individual asset vs. similar
assets that are in a portfolio of multiple assets we typically see a premium of
5-15% for the portfolio. A portfolio
allows a buyer to deploy more capital at once, achieve greater economies of
scale, makes it easier to enter a new geographic location, and often allows for
more attractive financing terms.
Whether you own one community or several, the first step in
determining value is to engage an experience professional to assist in the
valuation and analysis of your property/properties. Let us know if you would like a no-obligation
market analysis.
