Guide to Selling a Memory Care Centers Practice in Denver, CO

The market for memory care centers in Denver is strong, driven by high demand and significant recent investment. For practice owners, this presents a clear opportunity. Realizing your facility’s full value, however, requires more than just good timing. It requires a deep understanding of what buyers are looking for and strategic preparation to meet their expectations. This guide provides a look into the key factors shaping sales in today’s market.

The Denver Memory Care Market: A Snapshot

If you are considering a sale, you are in a great position. The Denver market for memory care is not just stable; it is expanding. This creates a favorable environment for practice owners who are prepared to capitalize on current trends.

High Demand and Pricing Power

Denver is experiencing a growing need for specialized memory care. With 44% of Colorado’s assisted living residents having a dementia diagnosis, demand is high and sustained. This is reflected in pricing. The average cost of memory care in the Denver area has increased by over 10% in the last two years, demonstrating strong market health and pricing power for well-run facilities.

A Growing, Valuable Sector

On a larger scale, the memory care market was valued at $5.82 billion in 2022 and is projected to grow steadily. With occupancy rates for quality facilities often exceeding 90%, buyers see these practices as secure and profitable investments. This is not a fleeting trend. It is a fundamental market shift that rewards specialized, high-quality care providers.

Key Considerations Before You Sell

A strong market attracts sophisticated buyers. They will look beyond the surface and examine the core operational health of your practice. Getting ahead of their questions is key. We find that focusing on three specific areas makes the biggest impact.

1. Regulatory Readiness. Buyers will verify perfect compliance with the Colorado Department of Public Health and Environment. This includes everything from proper licensing to facility requirements and, importantly, the new dementia training mandates for staff under SB22-079. Having your documentation organized and complete is non-negotiable.
2. Staffing Story. While Colorado does not set mandatory staff-to-resident ratios, buyers will. They analyze staff qualifications, turnover rates, and the culture you have built. Demonstrating a stable, well-trained, and dedicated team is one of the most powerful ways to build buyer confidence and justify a premium valuation.
3. Financial Clarity. Be prepared to present at least three years of clean financial statements. Buyers want to see consistent occupancy, clear revenue streams, and predictable expenses. This transparency removes uncertainty and speeds up the entire due diligence process.

Denver’s M&A Market Activity

The theoretical value of the Denver market is being proven by real-world transactions. Both private equity groups and strategic acquirers are actively investing in the area, a strong signal of long-term confidence. These are not small deals. They are significant acquisitions that reflect the high value placed on well-managed memory care facilities. The activity shows that capital is available and waiting for the right opportunities.

Here are a few recent examples of market activity in and around Denver that illustrate the trend:

Navigating the Sale Process

Selling a practice is a structured process, not a single event. Understanding the path forward helps you maintain control and anticipate challenges. While every sale is unique, the journey generally follows a few key phases.

1. Preparation and Positioning. This is where the most value is created. We work with owners to review operations, financials, and compliance, framing the practice’s story to attract the ideal buyers. This often starts 1-2 years before a sale.
2. Professional Valuation. An objective, data-driven valuation sets a realistic price range and forms the foundation of your negotiation strategy.
3. Confidential Marketing. Your practice is presented confidentially to a curated list of qualified buyers. This creates competitive tension to ensure you receive the best possible offers.
4. Due Diligence. The buyer will conduct a deep dive into your practice. This is the stage where deals most often fall apart. Thorough preparation is the key to a smooth and successful diligence phase.
5. Negotiation and Closing. The final phase involves negotiating the definitive agreements and managing legal and financial steps to a successful close.

How Your Practice Will Be Valued

Understanding your practice’s value is the first step toward a successful sale. Buyers do not just look at your net income. They use a more sophisticated approach to determine what your facility is truly worth.

More Than Just Profit

The key metric is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure starts with your stated profit and then adds back owner-specific or one-time expenses, like an above-market salary or a vehicle lease. This process reveals the true earning power of the business for a new owner. Many owners are surprised to learn their Adjusted EBITDA is significantly higher than their net income.

The Power of the Multiple

This Adjusted EBITDA is then multiplied by a number called a “multiple” to arrive at your enterprise value. For a practice with over $1M in EBITDA, this multiple could be in the 5.5x to 7.5x range, or even higher. The exact multiple depends on factors like your facility’s size, staff stability, private-pay mix, and growth potential. It is not a fixed number. It is a reflection of risk and opportunity in the eyes of a buyer.

Planning for Life After the Sale

The transaction is not the end of the story. A successful transition is one where your personal and financial goals are met long after the papers are signed. Smart planning for what comes next should be part of the sale process from the very beginning.

1. Protecting Your Legacy and Staff. The right buyer will respect the culture you have built. We help you find partners who are committed to retaining your key staff and honoring the reputation you have earned in the community.
2. Structuring for Tax Efficiency. The structure of your sale has massive implications for your after-tax proceeds. Planning in advance can help you legally minimize tax burdens and maximize the net cash you take home.
3. The Second Bite of the Apple. Selling does not always mean walking away entirely. Many owners choose to “roll over” some of their equity, retaining a minority stake in the new, larger company. This allows you to take cash off the table now while sharing in the future upside when the larger platform sells again in 3-5 years.