This is the third year that The SeniorCare Investor has compiled the statistics for those brokerage firms that specialize in seniors housing and care, ranking them on volume. In the last two years, the rankings were based on dollar volume and number of transactions. This year, we have added the number of properties sold as well as the number of beds/units. The brokerage business in our sector has changed a lot in the past few decades. Twenty years ago, there were more direct deals, with the market less structured and less formal than it is today. The brokerage firms today are much more professional than years ago, and command respect from their clients, something that was often missing in the past. There is a bit of a misconception on the cost of hiring brokers to sell your senior care property or portfolio. The commission is not as expensive as it may sound, and the larger the deal the lower the percentage. For the rocks the brokers can turn over and find a buyer for your property at the highest price, well, without them, the price would probably be lower and in some cases, you may not be able to find a buyer. This is especially true for those “B” and “C” properties that have little or no institutional demand, and especially those properties that are losing money. Even with those “A” properties that should sell themselves, having an intermediary involved almost always helps the seller’s pricing as competition for those deals tend to be stiff.
This year, there were nine firms that participated in the rankings. One caveat is that investment banks who are involved in this sector do not typically like to be classified with real estate brokerage firms, so they usually have not participated. We also have to mention that in one case an investment bank was hired to sell a large portfolio, together with one of the brokerage firms, Healthcare Transactions Group (HTG). They both had their assignments as part of the transaction, and both were paid upon success, but we decided to divide the numbers in two as a fair allocation. In addition, we removed land sales and CON or bed license sales from everyone’s numbers, as these did not involve a senior care building. Just to show how important these brokerage firms are to the fluidity of the acquisition market, these nine firms had a total of 206 transactions last year, representing 497 properties, 53,492 units/beds and a total value of just over $6.2 billion. Just for these total stats, we gave full credit for the split deal mentioned above. Twenty years ago, these numbers would have been a pipe dream. You’ve come along way, baby.
| Brokerage Firm | Transactions |
|---|---|
| Blueprint Healthcare Real Estate Advisors | 53 |
| Marcus & Millichap/IPA | 43 |
| Senior Living Investment Brokerage | 42 |
| Cushman & Wakefield | 17 |
| HFF | 16 |
Starting off with number of transactions, Blueprint Healthcare Real Estate Advisors took the top spot with 53 sales. In 2016, they placed third in this category with 45 deals, so this is a nice move up the league tables for the four-year-old firm. In second place was Marcus & Millichap and IPA, a division of Marcus & Millichap, with 43 transactions, down from 2016, which was a record year for the firm. Just behind them was Senior Living Investment Brokerage with 42 transactions, also down a little from 2016. As far as number of transactions are concerned, these three firms were way ahead of their competitors, but as you will see, the placement changes when other factors are looked at. Rounding out the top five were Cushman & Wakefield with 17 deals, up from 13 in 2016, and HFF with 16 transactions, also up from 13 in the previous year. Behind them were Greystone with 13 sales (almost double the seven in 2016), CBRE with 11 transactions (down from 19), Evans Senior Investments with eight (did not participate in 2016) and Healthcare Transactions Group with three. There are some other firms that are building up their sales platform that we hope will be able to participate next year.
| Brokerage Firm | Dollar Value (in millions) |
|---|---|
| HFF | $2,209.7 |
| Cushman & Wakefield | $796.0 |
| Blueprint Healthcare Real Estate Advisors | $737.8 |
| Marcus & Millichap/IPA | $443.4 |
| Senior Living Investment Brokerage | $439.3 |
Moving on to the total dollar value of the transactions, the order begins to change. HFF topped the rankings in 2017 by a wide margin with just over $2.2 billion in recorded sales. This performance was the result of four transactions in excess of $100 million each, with two over $700 million. Deals of this size are not usually seen in the “real estate broker” world, but we believe this is changing as sellers realize that the industry expertise and buyer knowledge of these brokerage firms has grown significantly over the years.
In second place was Cushman & Wakefield with $796 million in transaction value, also helped by two transactions above $100 million. Just behind C&W was Blueprint with $737.85 million, up 33% from 2016. The company had one transaction above $100 million, but they just announced that Torey Riso came on board as Blueprint’s first president and CEO. We expect with his background as former CEO of Care Investment Trust, which was sold last year for $425 million, he will be looking for some larger transactions for the firm. Rounding out the top five were Marcus & Millichap/IPA with $443.4 million and Senior Living Investment Brokerage with $439.3 million. Both firms had one transaction over $100 million, which certainly helped to propel them into the top five for total dollars. Just behind SLIB was CBRE with $407.5 million (also one sale over $100 million) and Healthcare Transactions Group with $380.8 million, most of which came from the large transaction they co-brokered with an investment bank. Following them were Greystone ($259.8 million) and Evans Senior Investments ($202.9 million). Greystone had one deal above $100 million and Evans had one that was just shy of $100 million.
The sales by these brokerage firms are a combination of one-off transactions and portfolio sales. Obviously, the number of portfolio sales a firm handles will push the number of properties sold. For 2017, Blueprint took the top spot with 116 total properties involved in their sales performance. Historically, we have defined portfolios as three or more properties in a sale, and in 2017 Blueprint sold seven portfolios with 63 properties, two of which were quite large. In second place was HFF with 70 properties, with three portfolio sales, two of which were over 20 properties each.
The three other firms in the top five were very close to each other, with Healthcare Transactions Group having 56 properties helped by two portfolio sales (one was the largest of the year), Senior Living Investment Brokerage with 54 properties (three portfolios) and Marcus & Millichap/IPA with 53 properties (two portfolios). After the top five came Evans Senior Investments with 33 properties (two portfolios), Greystone with 29 properties (three portfolios), Cushman & Wakefield with 22 properties (two portfolios) and CBRE with 19 properties (two portfolios).
As would be expected, the ranking by number of units/ beds sold closely matched that of number of properties, with a little movement because some sales were of very small properties. Taking the top spot again was Blueprint with 11,974 units/beds, followed by HFF (8,647), Healthcare Transactions Group (7,724), Marcus & Millichap/IPA (5,678) and Senior Living Investment Brokerage (3,984). The remaining four firms were in a very tight band, with only 278 units/beds separating number six from number nine. Leading these four were Cushman & Wakefield with 2,610 units/beds, followed by Greystone (2,473), Evans Senior Investments (2,384) and CBRE (2,332).
It is quite remarkable that the transactional market for seniors housing and care properties is so fluid, given the operating intensity of the business, especially on the SNF side. We believe the specialty brokers have been a large reason for this. Senior care is not plain real estate, which is why hiring brokers who specialize in the sector is important since many of them have seen it all, understand the sales and closing process, and realize the sale has to be confidential during the marketing period.
