In this guide
- What an EBITDA multiple is
- EBITDA vs. SDE vs. cap rate
- What multiples care homes trade at
- Why the range is so wide
- Which method fits your facility
Key takeaways
- EBITDA multiple = enterprise value ÷ EBITDA — a way to price the operating business.
- Small owner-run homes often trade nearer SDE multiples (~1.5–3.5×); larger operations command more.
- Real-estate-heavy deals are usually priced on a cap rate applied to NOI, not an EBITDA multiple.
- Any single multiple is a starting point — size, income quality, and the real estate move it a lot.
What is an EBITDA multiple?
It''s a facility''s value expressed as a multiple of its earnings before interest, taxes, depreciation, and amortization. Enterprise value divided by EBITDA gives the multiple; multiply a facility''s EBITDA by a market multiple and you get an estimated value for the operating business. It''s most useful for larger, professionally managed operations.
EBITDA vs. SDE vs. cap rate — what''s the difference?
They''re three lenses on the same question, suited to different facilities.
| Method | Best fit | What it prices |
|---|---|---|
| SDE multiple | Small, owner-operated homes | Owner''s total benefit (add owner pay back) |
| EBITDA multiple | Larger, staffed operations | The operating business |
| Cap rate on NOI | Real-estate-heavy deals | The income-producing property |
For most care homes where the building conveys, the cap-rate method is the anchor — see assisted living cap rates and how to calculate NOI.
What multiples do care homes trade at?
It varies widely, so treat published ranges cautiously. Broker-reported data for senior-care businesses has put SDE multiples in roughly the 1.5–3.5× range and EBITDA multiples higher for larger operations, but these shift with size, margins, and market. Because small residential homes are often valued on their real estate and income rather than a business multiple, a per-facility analysis beats any rule of thumb. (Ranges from broker-reported senior-care transaction data, 2025 — verify current figures for your market.)
Why is the range so wide?
Size, income quality, owner-dependence, and whether real estate is included all move the multiple. A stabilized, professionally staffed community earns a higher multiple than a small owner-run home with lumpy occupancy — the same forces that compress a cap rate.
Which method fits your facility?
If the real estate conveys, anchor on cap-rate-on-NOI; if you''re selling a small owner-run operation, an SDE multiple may fit better. A specialist will use the right lens and defend it with comparables. To pressure-test a number now, try our free valuation tool or read how facilities are valued.
Ready for a real figure? Connect with a Buy Sell Assisted Living expert.
Informational only — not financial, tax, or investment advice. Multiples vary by source, size, and market; verify with qualified professionals.