NORWALK, CT – April 14, 2020 – The number of publicly announced seniors housing and care acquisitions in the first quarter of 2020 dropped below 100 transactions for the first time since the first quarter of 2018, with 95 deals, based on new acquisition data from Irving Levin Associates. This represents a 17% decline from the 114 transactions announced in the fourth quarter of 2019 and a 19% decrease from the 117 in the first quarter of 2019. Buyers also committed fewer dollars to Q1 deals, spending a total of $2.7 billion on seniors housing and care deals in the first quarter, 28% lower than the $3.7 billion in Q4:19. “After peaking in 2019 in terms of activity and valuation, seniors housing and care M&A had already started to cool slightly in the beginning of the year,” stated Ben Swett, Editor of The SeniorCare Investor. “But it especially tailed off towards the end of the quarter when the COVID-19 pandemic began shutting down large swaths of the U.S. economy and put a lot of deals, and the funding for them, on hold.”
As per usual, private senior care providers made up the majority of buyers, counting for nearly 50% of all Q1 acquisitions. REITs and real estate investment firms made 28% of the deals, and 11% were announced by private equity firms, but these companies are often secretive about their purchases, so those proportions are likely low. Those ratios were nearly identical to the previous quarter. Tryko Partners was the most prolific buyer with three skilled nursing acquisitions, while four companies, The Ensign Group, National Health Investors, LTC Properties and Impact Healthcare REIT, each disclosed two deals. Welltower’s pending $740 million acquisition of a seniors housing portfolio in the western United States was the largest deal, by price.
Skilled nursing deals continued to represent a smaller share of the transaction volume, just 38% in the first quarter, as buyers took a wait-and-see approach with regard to the implementation of PDPM. However, skilled nursing facilities accounted for 60% of the properties sold in the quarter compared with 40% for independent living, assisted living, memory care, active adult and CCRC properties. “Seniors housing has attracted the most investor attention in recent years, but skilled nursing facilities seemed to be facing fewer roadblocks to close during and in the immediate aftermath of the COVID-19 pandemic.” continued Swett.
All quarterly results are published in The Health Care M&A Report for all 13 sectors of health care, which is part of the HealthCareMandA.com. In addition, annual results of the seniors housing and care acquisition markets were published this year in the 25th Edition of The Senior Care Acquisition Report. The comprehensive report will have more than 300 pages of transaction details and valuation statistics in a two-volume set, separated out by seniors housing and skilled nursing. For information, or to order the reports, call 800-248-1668. Irving Levin Associates was established in 1948 and has headquarters in Norwalk, Connecticut. The company publishes research reports and newsletters and maintains databases on the healthcare and seniors housing M&A markets.