Senior Care Valuation Market Weirdness

Asset valuations are out of whack amid continued investor appetite for properties but not companies.

I will be honest, sometimes I just don’t get it. I know some of you think I do, but the level of weirdness out there is greater than I have seen in my 30 years covering this sector. In today’s world, you have a group of investors that will pay a publicly traded company $325 million for their owned properties, but the entire company, including the owned properties, has a market value of only $100 million. Healthcare REITs, the most efficient buyers and owners of real estate, are trading at yields that would make a junk bond salesman blush, even though in most cases they have a lot of good real estate assets. Investors in the largest seniors housing company dumped their shares after finding out that management was not going to pursue a major capital event to juice the stock price. And they were surprised? In this environment? The people at Glenview Capital may think they are smart, but their investors may think otherwise at this point. And just to add to all of this craziness, when we start releasing some of our acquisition stats next week on our senior care M&A market webinar, there will be some new records revealed. , acquisition values are at a high, stock prices are at a low, and REIT yields are higher than they have been in 10 years. I assume you want to find out why. Join me next week.


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