The April deal total for the seniors housing and care market is in, the preliminary total at least, and if it is any precursor for M&A activity in the next few months, or longer…oh boy. A strong start to the month and anemic weeks afterwards pushed April’s transaction count to 21 publicly announced deals. We expect that figure to rise, but not by much since we imagine anyone who closed a deal in the last few weeks would want to shout that from the mountaintop.
It’s true that several April closings were all-but-completed by the time COVID-19 reared its ugly head in the country. They just needed a little nudge, and some good faith from the buyer, seller and lender. But many transactions that were not as far along in the process were paused, and hopefully not cancelled. And dealmaking dried up as April progressed, with more than half of the month’s deals closed in the first two days, leaving just 10 announced deals for the remaining four weeks.
We’ve heard of a number of transactions that are still moving along the pipeline, and more than a few lenders (usually smaller regional and local banks) offering term sheets and willing to provide capital. But we don’t expect May’s deal total to surpass April’s. Nor June, but you never know.
The largest senior care deal announced in April was LTC Properties’ disposition of its Preferred Care portfolio consisting of 22 skilled nursing facilities for $77.9 million. However, that deal was months in the making, and LTC was very motivated to exit those properties after Preferred Care filed for Chapter 11 bankruptcy protection in November 2017.
The next largest transaction, in terms of disclosed price, was also a skilled nursing deal and featured three facilities in Delaware. On April 15th, a joint venture between Comprehensive Care Capital, a healthcare real estate-focused private equity group and affiliate of The Rosdev Group, and Altitude Health Services, a national seniors housing/skilled nursing operator, announced that they would pay $67 million, or $141,650 per bed, for the portfolio. For more details, check out the story here.