“After the busiest period of dealmaking we have ever seen in December 2021, the market cooled throughout the first quarter…Unfortunately, the omicron variant, which worsened labor issues across the senior care industry, was largely to blame for many transaction delays.”
NEW CANAAN, Conn. (PRWEB)
April 13, 2022
The number of publicly announced seniors housing and care acquisitions in the first quarter of 2022 fell to 127 deals, based on new acquisition data from LevinPro LTC. This represents a 9% decrease from the 140 transactions in the previous quarter, but is 51% higher than the 84 deals made public in the first quarter of 2021. Also, the $3.87 billion spent on first quarter transactions fell by 2% from the previous quarter’s total of $3.94 billion.
“After the busiest period of dealmaking we have ever seen in December 2021, the market cooled throughout the first quarter,” stated Ben Swett, Editor of The SeniorCare Investor. “Unfortunately, the omicron variant, which worsened labor issues across the senior care industry, was largely to blame for many transaction delays.”
There were 35 total portfolio deals with at least three properties per deal announced in the first quarter of 2022, more than any quarter since before the pandemic, including Q4:21, which had 30 portfolio deals. Welltower’s acquisition of 33 seniors housing communities in Michigan, Ohio and Tennessee for $548 million, or $196,600 per unit, represented the largest portfolio of properties sold in the quarter. There were also a couple of sales of operating companies, including Avery Healthcare in the United Kingdom and Allity in Australia. On the skilled nursing side, an undisclosed East Coast owner/operator acquired 17 facilities in Ohio for $145 million, or $72,500 per bed. The quarter saw 12 deals with 10 or more properties each, leaving 23 separate transactions with between three and nine properties.
Looking at the mix of buyers, financial buyers including private equity, private real estate investment firms and REITs accounted for 34% of the transactions announced during the first quarter. Private equity firms themselves made up 13% of the quarter’s buyers, but interestingly they were not concentrated in the SNF sector. Rather, 30% of PE deals were for majority-SNF assets, and the remainder was for seniors housing deals.
“Much has been made by the media and the current administration about private equity’s growth in the skilled nursing space, but PE buyers of skilled nursing assets accounted for just 4% of the quarter’s deal activity,” added Swett. “That does not seem like a stampede.”
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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