Value of a Senior Housing or Assisted Living Facility

At Haven Senior Investments, we know that determining the true value of your senior living community is no small task. It’s a process that requires expertise, precision, and a personalized approach. That’s why we don’t rely on just one method—we take a thorough, multi-faceted approach to ensure every aspect of your business is carefully evaluated.

We begin by analyzing your community’s historical financial performance, then apply multiple valuation methods to ensure an accurate and well-rounded assessment. When we bring your property to market, we establish a solid foundation price backed by data while also identifying the potential for a higher market reach price. This approach gives you a clear picture of your property’s value and its potential in today’s dynamic market.

Here’s an overview of the two primary approaches we use to value senior living communities:

Income Capitalization Approach

The Income Capitalization Approach calculates value by applying a capitalization rate (Cap Rate) to your property’s net operating income (NOI). For stable businesses with income levels in line with industry norms, the formula is simple:
Value = NOI ÷ Cap Rate

This method is widely used because it’s effective for valuing both businesses and real estate investments. However, its accuracy depends on choosing the right Cap Rate and properly classifying income and expenses. It’s also important to account for external factors, like interest rate changes, which can impact the valuation.

Sales Comparison Approach

The Sales Comparison Approach looks at recent sales of similar senior living communities to identify a comparable value. By examining similarities and differences—like facility size, condition, and operating class—we adjust for key factors to calculate a per-unit valuation.

While this method is a valuable cross-check against other approaches, it has its limits. It doesn’t account for differences in financial performance and relies on selecting and normalizing comparable data. For this reason, it’s best used as part of a broader valuation strategy.

At Haven Senior Investments, we’re here to guide you through this process, offering clarity, expertise, and a personalized approach to help you make confident decisions. Let us help you uncover the full value of your senior living community.

This version emphasizes clarity, engages the reader with a conversational tone, and focuses on the benefits to the business owner.