Buy an Assisted Living Facility in Denver, CO

Denver's Assisted Living Market

Denver sits in one of the fastest-aging metro areas in the Mountain West. Colorado's 65-plus population grew over 40% between 2010 and 2020, and that cohort is now entering peak assisted living demand years.

The city's $91,681 median household income means families here can sustain above-average monthly resident rates, which directly supports facility cash flow and asking prices.

Across the national market, 54 assisted living facilities are currently listed for acquisition. Asking prices range from $150K for small owner-operated homes to $25M for larger licensed facilities. The median sits at $1.5M, with a median cash flow of roughly $339K per year.

That spread tells you something: this is not a commodity category. The same license type can attach to a 6-bed residential care home or a 40-bed institutional facility. Know what you are buying before you underwrite it.

Deal Economics

At the median asking price of $1.5M and $339K in annual cash flow, the implied multiple is 3.7x. That is inside the SBA sweet spot of 3x to 5x, which means these deals are generally financeable without exotic structuring.

Here is what a straightforward deal at the median looks like:

• Asking price: $1,500,000
• Annual cash flow: $339,000
• Implied multiple: 3.7x
• SBA loan (80%): $1,200,000
• Seller note (10%, full standby): $150,000
• Buyer cash injection (5%): $75,000
• Approximate annual debt service (10-year term, ~10.5%): $163,000
• DSCR: 2.08x

A 2.08x DSCR at median is clean. That gives you margin if occupancy dips 10% to 15% in year one, which is common during ownership transitions.

These are rough estimates based on market data. Actual terms depend on individual qualification and lender.

What Makes Assisted Living Different for SBA Buyers

Assisted living facilities carry a layer of complexity most business acquisitions do not. Three things make them distinct.

Licensing. Every state-licensed facility has a capacity certificate and a compliance history. Colorado's CDPHE (Department of Public Health and Environment) licenses assisted living residences (ALRs). Any citation history, pending complaints, or capacity restrictions travel with the license, not the seller. Pull the full inspection and complaint history before you submit an LOI.

Revenue concentration risk. Facilities with 80% or more of residents on private pay are generally stronger acquisition targets than those heavily dependent on Medicaid reimbursement. Medicaid rates in Colorado are set by the state and subject to annual revision. Private-pay revenue gives you pricing flexibility; Medicaid does not.

Staff and administrator licensing. Colorado requires a licensed administrator to run each facility. If the current owner holds that license personally and is exiting, you need a qualified replacement on day one of closing, not day thirty. SBA lenders will ask about this in underwriting.

What to Look For in a Denver Facility

Occupancy is the single most important metric. Target facilities running at 85% or higher for the trailing 12 months. Below 80% is a yellow flag unless the seller can document a specific, fixable cause (temporary staff shortage, one-time refurbishment).

Beyond occupancy, review the following before making an offer:

Staffing costs as a percentage of revenue. Assisted living labor is the largest expense category. In Colorado, staffing typically runs 50% to 65% of revenue. If you see 70% or higher, the facility is either understaffed (a liability) or overpriced.

Lease vs. real estate included. Many facilities operate in leased buildings. If the real property is not included in the sale, you need to understand the lease term, renewal options, and whether the landlord has approval rights over a change of ownership. A facility on a lease expiring in 18 months is a different acquisition than one you own outright.

Resident acuity mix. Higher-acuity residents generate higher monthly rates but also require more staff per resident. Make sure the staffing model and current rates are calibrated to the actual resident population, not a theoretical one.

Frequently Asked Questions

How much does it cost to buy an assisted living facility in Denver?

Asking prices for assisted living facilities in Denver and the broader Colorado market range from $150K for small residential care homes to $25M for larger institutional facilities. The national median asking price is $1.5M, with median annual cash flow around $339K, implying a 3.7x multiple.

Can I use SBA financing to buy an assisted living facility in Colorado?

Yes. Assisted living facilities are eligible for SBA 7(a) financing. The standard structure is roughly 80% SBA loan, 10% seller note on full standby, and 5% buyer cash injection. At a $1.5M purchase price, the buyer cash requirement is approximately $75K.

Do I need a healthcare background to buy an assisted living facility in Denver?

Colorado requires a licensed facility administrator on-site, but the owner does not need to hold that license personally. Many buyers hire a licensed administrator and operate as the owner-operator. SBA lenders will want to see a management plan that addresses continuity of care and licensing before closing.

What is a reasonable DSCR for an assisted living acquisition?

Regalis Capital targets a 2x debt service coverage ratio on assisted living acquisitions, with a floor of 1.5x. At the Denver market median of $339K cash flow and approximately $163K in annual debt service on a $1.2M SBA loan, the implied DSCR is around 2.1x, which is within the target range.

How long does it take to close on an assisted living facility in Colorado?

SBA acquisitions typically close in 60 to 90 days from signed LOI. Assisted living deals can run longer, often 90 to 120 days, because state license transfer and lender review of compliance history add time to the process. Building in a longer timeline during letter of intent negotiations is standard practice.

Looking to Acquire an Assisted Living Facility in Denver?

Assisted living acquisitions involve more moving parts than most SBA deals: state licensing, administrator continuity, occupancy verification, and Medicaid exposure all need to be worked through before you get to the closing table.

Regalis Capital's deal team reviews 120 to 150 deals per week and has specific experience structuring assisted living acquisitions with full-standby seller notes and SBA financing.

If you are evaluating a facility in Denver or elsewhere in Colorado, start with a free deal assessment to see how the numbers stack up.