Selling your skilled nursing facility is more than a transaction. It’s the culmination of your life’s work. For owners in Oregon, navigating the unique market dynamics is key to securing your legacy and maximizing value. This guide provides a clear overview of the landscape, from understanding current market trends to preparing for life after the sale. We’ll walk through the key issues you need to consider.
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Market Overview
The Oregon market for skilled nursing facilities (SNFs) is unique. If you’ve looked at national data, you might have noticed that it doesn’t quite match what you see on the ground. Oregon has one of the lowest SNF occupancy rates in the country, averaging around 67%. This isn’t a sign of failure. It’s a reflection of the state’s longstanding focus on community-based and in-home care.
For a potential buyer, this means they aren’t just looking for full beds. They are looking for efficient, high-quality operations that thrive within this specific environment. A facility that can demonstrate strong clinical outcomes, stable staffing, and profitability, even without 95% occupancy, tells a powerful story of operational excellence. It’s a different kind of market, and it requires a different kind of strategy.
Key Considerations
When preparing to sell your Oregon SNF, a buyer will look closely at several specific areas. Getting these right before you go to market can significantly impact your final outcome. We find that focusing on three main areas prepares you for the most common questions.
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Regulatory Readiness: Buyers will scrutinize your compliance with the Oregon Department of Human Services (ODHS) regulations. This includes having a clean survey history, clear plans of correction for any past deficiencies, and well-documented licensing. A pristine compliance record is a major asset.
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The Financial Story: Your financial statements must be transparent and well-organized. Buyers will want to see a clear breakdown of your payer mix (Medicare, Medicaid, private pay), historical census data, and detailed revenue and expense reports for the last 3-5 years. This is about more than just profit. Its about proving financial stability and predictability.
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Operational Excellence: What makes your facility special? This is where you highlight your differentiators. It could be specialized care programs (like memory care or rehab), high CMS Star Ratings, a strong reputation in the community, or an experienced, stable staff with low turnover.
Market Activity
You might be wondering if this is a good time to sell. The answer is that the market is active. We are seeing significant interest in Oregon from both large national operators and regional groups looking to expand their footprint. For example, the recent acquisition of several Oregon facilities by the Ensign Group shows that sophisticated buyers see value in this market.
This activity is also tracked by the Oregon Health Authority (OHA), which maintains a public list of healthcare facility ownership changes. The presence of these strategic buyers means there is capital ready to be deployed for the right opportunities. They are seeking well-run facilities that can be integrated into their larger platforms. This creates a competitive environment where a properly positioned practice can attract strong offers.
The Sale Process
Selling a practice is a structured journey, not a single event. Understanding the stages can remove much of the uncertainty. While every sale is different, the path generally follows a few key steps.
Step 1: Preparation and Positioning
This is the most important phase, and it happens long before a buyer is ever contacted. It involves a deep dive into your financials to find your true earning power, organizing all your operational and regulatory documents, and crafting the story of your practices value. This is where you prepare for the tough questions so you have the right answers.
Step 2: Confidential Marketing
Your practice is not “listed for sale.” Instead, we run a confidential process to find the right partner. This involves identifying a curated list of potential buyers who align with your goals for legacy and continuity, and then approaching them discreetly to gauge interest without disrupting your staff or residents.
Step 3: Diligence and Closing
Once an offer is accepted, the buyer will begin due diligence. They will verify all the information you have provided, from financial records to employee contracts. Being thoroughly prepared for this step is critical. It prevents surprises and keeps the deal on track toward a successful closing.
Valuation
One of the first questions an owner asks is, “What is my facility worth?” The answer is rarely found on a simple profit and loss statement. Sophisticated buyers value a practice based on a metric called Adjusted EBITDA, which stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.
The goal is to determine the true cash flow of the business. We start with your stated net income and then add back expenses that a new owner would not incur. This can include your personal salary above market rate, one-time repairs, or personal auto expenses. This process often reveals that a practice is significantly more profitable than it appears on paper.
| Financial Item | Amount | Explanation |
|---|---|---|
| Reported Net Income | $400,000 | The “bottom line” on your tax return. |
| Owner Salary Add-Back | +$150,000 | Adjusting owner’s $250k salary to a $100k market rate. |
| One-Time Roof Repair | +$50,000 | A non-recurring expense a new owner won’t have. |
| Adjusted EBITDA | $600,000 | The true earnings power a buyer will value. |
This Adjusted EBITDA figure is then multiplied by a market-specific multiple to determine your facility’s enterprise value. This method provides a far more accurate picture of your practice’s worth.
Post-Sale Considerations
The deal is not done when the papers are signed. Planning for what comes next is just as important as negotiating the sale itself. A successful transition ensures your personal goals are met and the legacy you built continues. Thinking about these things early in the process gives you more control over the outcome.
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Ensuring Staff and Resident Continuity. A smooth transition plan for your team and residents is critical. This is often a key point for buyers, who want to retain the experienced staff that makes your facility successful. Structuring the deal to protect your team is a priority.
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Structuring Your Financial Future. How the sale is structured has major implications for your after-tax proceeds. Decisions about issues like earnouts, where you receive a portion of the sale price based on future performance, require careful financial modeling to ensure you understand the risks and rewards.
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Defining Your New Role. Many owners choose to stay on for a period after the sale. Do you want to continue practicing clinically, take on a leadership role, or exit completely? Defining this early helps find a buyer whose vision aligns with yours, which is key to avoiding the feeling of losing control.
Frequently Asked Questions
What makes the Oregon SNF market unique compared to national trends?
Oregon has one of the lowest SNF occupancy rates in the country, averaging around 67%. This reflects the state’s focus on community-based and in-home care rather than a failure of facilities. Buyers look for efficient, high-quality operations with strong outcomes and profitability, even at lower occupancy rates.
What are the key areas a buyer will scrutinize when considering the purchase of an Oregon SNF?
Buyers will focus on: 1) Regulatory Readiness, including compliance with Oregon Department of Human Services regulations and a clean survey history, 2) Financial Story, with transparent financial statements showing payer mix, historical census, and detailed revenue and expenses over the last 3-5 years, and 3) Operational Excellence, highlighting specialized care programs, CMS ratings, community reputation, and staff stability.
How is the valuation of an Oregon SNF typically determined?
Valuation is based on Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), which adjusts the reported net income by adding back non-recurring or overstated expenses such as owner’s above-market salary or one-time repairs, revealing the true cash flow. This Adjusted EBITDA is then multiplied by a market-specific multiple to find the facility’s enterprise value.
What does the sale process for an Oregon SNF generally involve?
The sale process typically involves three main stages: 1) Preparation and Positioning to organize financial and operational information and craft the facility’s value story, 2) Confidential Marketing where a targeted set of potential buyers is discreetly contacted to avoid disruption, and 3) Diligence and Closing, where the buyer verifies all information and employee contracts to finalize the sale.
What are important post-sale considerations for an Oregon SNF owner?
Post-sale planning includes ensuring staff and resident continuity to retain experienced personnel, structuring the financial aspects of the sale to optimize after-tax proceeds including earnouts, and defining the owner’s new role, whether staying involved clinically, in leadership, or fully exiting. Early planning helps ensure a smooth transition and alignment with the buyer’s vision.
