Selling your Assisted Living Facility (ALF) in Orlando is a significant decision. The market is currently experiencing strong growth, presenting a unique window of opportunity for owners. But capturing the full value of your life’s work requires more than good timing. It requires a deep understanding of market trends, buyer expectations, and a structured sale process. This guide provides key insights to help you navigate this journey and prepare for a successful transition.
Curious about what your practice might be worth in today’s market?
Market Overview: Why Orlando is a Seller’s Market
The market for senior living in Orlando is not just recovering. It is expanding rapidly. Investor interest is high, and demographic trends are creating sustained demand. For ALF owners, this translates into a favorable environment for a potential sale. The data paints a clear picture of this opportunity.
Here are a few key market indicators you should know:
1. Strong Growth Projections. The U.S. assisted living market is projected to grow at a compound annual growth rate of 5.53% through 2030. This national trend is strongly reflected in high-growth areas like Central Florida.
2. Rising Occupancy. After the pandemic, senior living occupancy rates are bouncing back. Many secondary markets, including those around Orlando, are seeing rates approach or exceed 90%.
3. Increasing Costs & Revenue. In 2023, the average monthly cost for assisted living in Orlando was $4,585, up from $4,185 the year before. This demonstrates strong pricing power and revenue potential for well-run facilities.
Timing your practice sale correctly can be the difference between average and premium valuations.
Key Considerations for Orlando ALF Owners
Selling an ALF is different from selling a typical business or property. In Florida, your facility is a healthcare entity, a real estate asset, and an operating business all in one. The value is a blend of these parts, with about 55% coming from the business operations and 45% from the real estate itself. This dual nature introduces unique challenges.
You must maintain full compliance with the Agency for Health Care Administration (AHCA) throughout the entire sale process, as buyers will scrutinize your licensing and records. They will also focus heavily on the stability of your staff, the culture of your facility, and any upcoming capital expenditures needed. Preparing for these specific questions is a critical first step.
Your legacy and staff deserve protection during the transition to new ownership.
Market Activity: Investors Are Targeting Central Florida
The strength of the Orlando market is not just theoretical. We are seeing significant transaction activity. Large real estate firms and private investment groups are actively acquiring facilities in the area, signaling confidence in the region’s long-term growth.
Who is Buying?
The buyer pool is diverse. It ranges from smaller, local operators looking to expand their footprint to large, national management companies and real estate investment trusts (REITs). For example, the recent acquisition of Oakmonte Village in nearby Lake Mary by PGIM Real Estate shows that sophisticated, institutional capital is flowing into the market.
What Does This Mean for You?
This high level of interest creates a competitive environment, which can drive up valuations. However, it also means you need a strategy. The right buyer for your facility depends on your goals. Some buyers focus on preserving legacy, while others prioritize aggressive growth. Knowing the landscape is key to finding the right fit and securing the best terms. Many owners think they should wait, but preparing now, while the market is active, means you sell on your terms, not theirs.
Understanding your practice’s current market position is the first step toward a successful transition.
Valuation: What Is Your Facility Really Worth?
Determining the value of your ALF is one of the most important steps in the sale process. Buyers are not just looking at your net income. They are focused on a metric called Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure provides a truer picture of your facility’s core profitability by adding back owner-specific expenses like above-market salaries or personal vehicle costs.
Most practice owners are surprised to learn their Adjusted EBITDA is significantly higher than their reported net income. This is where value is often hidden. A professional valuation normalizes these financials to build a case for the highest possible price. It combines the business valuation, based on a multiple of that Adjusted EBITDA, with a separate valuation for your real estate. Mistaking a simple “rule of thumb” for a real valuation can leave a lot of money on the table.
A comprehensive valuation is the foundation of a successful practice transition strategy.
Sale Process: A Roadmap to a Successful Closing
A successful sale does not happen by accident. It follows a structured, confidential process designed to maximize value while minimizing disruption to your operations. Trying to manage this alone often leads to preventable errors, from messy financials to broken confidentiality. Running a professional process creates competition among buyers and protects you from common pitfalls.
Here is a simplified look at the stages and where expert guidance is critical.
| Stage | What It Involves | Where Deals Go Wrong |
|---|---|---|
| Preparation & Strategy | We help normalize financials, gather compliance documents, and define your personal and financial goals. | Sellers present messy books or have unclear goals, which lowers buyer confidence. |
| Valuation & Marketing | We perform a comprehensive valuation and confidentially approach a curated list of qualified buyers. | Using public listings attracts unqualified buyers and breaches confidentiality. |
| Due Diligence | The buyer conducts a deep dive into your financials, operations, and compliance records. | Unexpected issues surface, stalling the deal or leading to price reductions. |
| Closing & Transition | We assist in final negotiations, coordinating legal work, and ensuring a smooth handover. | Poor transition planning harms staff morale and resident care. |
The due diligence process is where many practice sales encounter unexpected challenges.
Post-Sale Considerations: Securing Your Future
Closing the sale is a milestone, but it is not the end of the story. How the deal is structured has major implications for your future. For instance, are you taking all cash at closing, or are you participating in an earnout, where you receive additional payments based on future performance? These structures require careful negotiation.
Another common strategy is “rolling over” a portion of your equity, meaning you retain a minority ownership stake in the new, larger company. This allows you to take a significant amount of cash off the table now while also giving you a “second bite at the apple” when the new entity is sold again in the future. Planning for these post-sale scenarios before you go to market ensures your transition aligns with your long-term financial goals and legacy.
Every practice sale has unique considerations that require personalized guidance.
Frequently Asked Questions
Why is Orlando currently considered a seller’s market for Assisted Living Facilities (ALFs)?
Orlando is a seller’s market due to strong growth projections in the assisted living sector, rising occupancy rates nearing or surpassing 90%, and increasing monthly costs for assisted living services which indicate strong pricing power and revenue potential for ALFs.
What unique challenges do ALF owners face when selling their facility in Orlando?
ALF owners in Orlando must navigate the dual nature of their facility as a healthcare entity, real estate asset, and operating business. They must maintain full compliance with the Agency for Health Care Administration (AHCA), and buyers will closely examine licensing, staff stability, facility culture, and upcoming capital expenditures.
Who are the typical buyers for ALFs in the Orlando market?
Buyers range from smaller local operators to large national management companies and real estate investment trusts (REITs). Institutional investors like PGIM Real Estate are also actively acquiring facilities, reflecting confidence in the region’s growth.
What is Adjusted EBITDA and why is it important in valuing my ALF?
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) provides a clearer picture of your facility’s core profitability by excluding owner-specific expenses. It‚Äôs key for valuation as it often reveals hidden value higher than reported net income, helping achieve the highest possible sale price.
What steps are involved in the sale process of an ALF to ensure a successful transaction?
The sale process includes:
1. Preparation & Strategy – normalizing financials and defining goals
2. Valuation & Marketing – performing a comprehensive valuation and approaching qualified buyers confidentially
3. Due Diligence – buyer verification of financials, operations, and compliance
4. Closing & Transition – final negotiations, legal work, and smooth handover
Expert guidance at each stage helps avoid common pitfalls and maximize value.