It appears we have hit the bottom of the seniors housing and care M&A market. For the second month in a row, we have recorded 18 publicly announced transactions in July, according to our database Deal Search Online. That is less than half of the monthly average in 2019 of 37.5 deals, and when taking into account the deals that actually closed in July (as opposed to publicly disclosed), activity was likely even lower. And from what we hear on the ground, conditions for dealmaking are not improving as quickly as was maybe thought back in May. And certainly not quick enough for the parties involved in closing the deals, we’re sure.
Just over half of the deals were for seniors housing assets, while skilled nursing facilities represented eight of the sales. Two of those SNF sales were also the largest of the month in terms of both number of facilities and purchase price. Both saw France-based investment firms acquire large portfolios in Germany. Primovie took over six skilled nursing facilities, one retirement residence and one mixed-use community with around 900 skilled nursing beds and 163 senior living units for nearly $165 million. The other deal had Icade, a real estate investor, acquire eight SNFs in Germany and one in Marseilles, France with 906 total skilled nursing beds and 142 apartments for close to $168 million. We suppose they are further ahead on the COVID-19 curve than we are in the states.
The largest seniors housing deal of the month was Ventas’ sale of seven memory care communities for $52 million. This deal got a lot of coverage when it was revealed that the buyer, MedCore Partners with The National Realty Group and Kong Capital, negotiated the price down from $70 million as a result of Q4 operating results and the new post-COVID environment. BMO Harris Bank provided a senior loan to fund the purchase, and Locust Point Capital helped secure the equity.
In the next couple of weeks, we may have a better understanding of the M&A market as the publicly traded companies come out with their third quarter earnings reports. But we’re not expecting many acquisition or disposition announcements.
