“M&A activity remained at an elevated level in the second quarter. Pandemic fatigue from operators, owners and sometimes their capital providers has prompted many property sales, which was helped by steady occupancy growth across the industry, allowing buyers to better model future performance.”
NEW CANAAN, Conn. (PRWEB)
July 11, 2022
The number of publicly announced seniors housing and care acquisitions in the second quarter of 2022 dropped to 135 deals, based on new acquisition data from LevinPro LTC. This represents a 3% decrease from the 139 transactions in the previous quarter, but is 19% higher than the 113 deals made public in the second quarter of 2021. Also, the $3.03 billion spent on second-quarter transactions fell by 28% from the previous quarter’s total of $4.21 billion.
“After the two quarters of the strongest dealmaking we have ever seen at the end of 2021 and the start of 2022, M&A activity remained at an elevated level in the second quarter,” stated Ben Swett, Editor of The SeniorCare Investor. “Pandemic fatigue from operators, owners and sometimes their capital providers has prompted many property sales, which was helped by steady occupancy growth across the industry, allowing buyers to better model future performance.”
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 the investor interest for them.
A total of 332 properties were involved in the second quarter’s 135 publicly announced transactions. There were 36 portfolio deals with at least three properties per deal announced in the quarter, which is up from the 35 portfolio deals in the previous quarter. The second-quarter total is also more than any quarter since before the pandemic. Welltower announced the largest acquisition, which comprised 25 active adult communities previously owned by Calamar, for $502 million, or $172,000 per unit. A joint venture between a Morgan Stanley Real Estate Investing fund and Foundry Commercial announced the second-largest deal of the quarter when it acquired the Spring Arbor Senior Living portfolio for an undisclosed price. The deal included the purchase of 24 assisted living/memory care communities from HHHunt and of the operating company Spring Arbor Senior Living.
A handful of companies made multiple acquisitions during the second quarter of 2022, 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), but a plurality of the deals did not have a disclosed buyer. Private owner/operators accounted for a third of transactions in Q2, followed by private real estate investment firms (19%) and REITs (10%). Private equity firms accounted for just 5% of the quarter’s deals across both seniors housing and skilled nursing. Not-for-profit organizations made 6% of the quarter’s deals, and the remainder of the buyers (27%) were not publicly disclosed.
“Private owner/operators are becoming the most active group of buyers of senior care properties,” added Swett. “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.”
All long-term care M&A deals dating back to 1993 can be accessed on the LevinPro database and can be purchased via a site license. All quarterly results are published in The Health Care M&A Report for all 13 sectors of health care, which is part of LevinPro HC. In addition, annual results of the seniors housing and care acquisition markets were published this year in the 27th Edition of The Senior Care Acquisition Report. For information, or to subscribe, call 800-248-1668. Irving Levin Associates was established in 1948 and has offices in New Canaan, Connecticut, and North Bethesda, Maryland. The company publishes research reports and newsletters, and maintains databases on the healthcare and seniors housing M&A markets.
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