Today’s news (SHN “Jumpy Investors” http://bit.ly/1R7j64E ) brings an interesting perspective saying that “investors are not cutting senior housing real estate investment trusts (REITs) any slack….” Is this an indication that we’re approaching the top of the market related to equity capital & debt for seniors housing purchases?
Looking at the vast criteria possible to determine when is the best time to sell your business, there are 3 criteria that, when combined, seem to give a good formula to determine if (and when) is the best time to sell your business. Even though I work in the seniors housing industry, these 3 criteria can be generalized for selling any business.
#1 of those criteria is: “When there’s money in the market.” For the seniors housing industry, that means that there is both equity capital & debt at relatively cheap rates. The lower the rates are for equity & debt mean that there is less money going to the investors & banks, and more money in the deal for the seller.
We’ve been in a low (cheap) interest rate environment for about a decade. Yet, at some point, interest rates will rise and/or investors will be less enthusiastic about the real estate risk & operational risk of seniors housing. We’ve had an incredible influx of new money in the market for seniors housing for the last few years, but #1 criteria for best time to sell is when there is the most amount of money in the market compared to facilities available for sale. The trick then, if there is one, is to sell at the height of the market. Of course, the difficult part of that is to know when it’s the height and not to wait too long.
TO DISCUSS your options when considering the “3 Criteria to Determine the Best Time to Sell,” contact Chris Foley at (614) 915-8835 or email: cfoley@SeniorsFamily.com.
3 Criteria to know “When is the Best Time to Sell My Business”
#1 – When the Market is ready (money available)
#2 – When the Business is ready (profitable)
#3 – When the Owner is ready