Seniors Housing and Care M&A Level Remains 'Elevated'
“Pandemic fatigue'' prompted many property sales lately, though activity shrunk 3% in Q2.
With better “future modeling” available for seniors housing buyers, transactions in this sector continue to be “elevated” in Q2 2022, according to a report from LevinPro LTC.
The quarter featured transactions at a near-record pace, with 135 transactions, or just 3% lower than the 139 deals made public in the first quarter. However, the dollar volume during that period fell by 28% to $3.03 billion.
Pandemic fatigue from operators, owners and sometimes their capital providers have prompted many property sales, which was helped by steady occupancy growth across the industry, allowing buyers to better model future performance, according to Ben Swett, Editor of The SeniorCare Investor.
June Deals Led the Quarter
The quarter ended with 52 transactions announced in June, preceded by 34 in May and 49 in April. Overall, 40% of June’s deals were for skilled nursing facilities, but across the entire quarter, skilled nursing’s share of deals was just 33%.
“So, skilled nursing deal activity picked up significantly, after a couple of quarters of few facilities up for sale relative to investor interest for them,” according to the report.
Added Swett, “Private owner/operators are becoming the most active group of buyers of senior care properties. They are looking to build scale and efficiencies across a regional presence while remaining nimble enough to deal with labor and occupancy issues across their portfolios.”
These companies made multiple acquisitions during the second quarter, including Welltower (5), National Health Investors (3), Lloyd Jones (3), Trustwell Living (2), Elevation Financial Group (2), Chicago Pacific Founders (2) and Care Property Invest (a European REIT with two deals). A plurality of the deals did not have a disclosed buyer.