60 Seconds with Swett: Q2:23 M&A Activity Rebounds Above 100 Transactions
The M&A market rebounded, sort of, in the second quarter of 2023, rising to 110 publicly announced transactions, compared with 99 in the first quarter. Considering the economic shock of fast-rising interest rates, and how many deals died in all stages of the transaction pipeline last fall, the volume was actually impressive. Most of the dealmakers we talk to say that their pipelines are healthy, albeit moving slower and with more difficulty than before. We are still way down from the 147 transactions recorded in the second quarter of 2022, which annualized would have resulted in nearly 600 deals for the year. But a lot has changed in a year, clearly. We are missing the larger... Read More »
60 Seconds with Swett: What Will the Boomers Want?
The baby boomers have been referenced as the reason for investors to enter the seniors housing market for more than a decade, even though we are still several years away from the front end of them aging into the vast majority of seniors housing communities. But there is no guarantee that boomers will move into seniors housing, especially if new tech can better solve for health care, activities of daily living, property maintenance and socialization in the home, not to mention economic factors that may prevent seniors from selling their homes or may impact their savings and investment accounts to render seniors housing services unaffordable to them. Beyond all that, what if the current... Read More »
60 Seconds with Swett: The Persistence of Higher Capital Costs
After the Fed held interest rates steady following 10 consecutive increases but left the door open for potentially two additional increases this year, you can’t help but think, what has gone as planned, or as predicted, in the last several years? Very little, unfortunately. Inflation has persisted in the economy, and rates will have to remain elevated for longer than earlier projections. Sounds a little familiar to the overly optimistic predictions of a seniors housing occupancy and margin recovery, post-pandemic, which is taking longer to materialize, and may never happen in many markets. We’re just saying that a little more conservatism may be needed in people’s projections or proformas... Read More »
60 Seconds with Swett: Supreme Court Decision Hits Public SNFs
So much of the ire against skilled nursing facilities (personal, political and in the media) has been directed towards privately-owned facilities, and mainly their ownership those they deem as “private equity”, because of their great sin of caring for nursing home patients at a profit, and often not even at one. However, a recent Supreme Court ruling is now opening up public SNFs to the threat of lawsuits on the basis of civil rights violations. After the wife of a patient with dementia in a county-owned SNF in Indiana sued alleging he was unnecessarily chemically restrained and involuntarily transferred without their consent, which would be violations of the Federal Nursing Home Reform... Read More »
60 Seconds with Swett: Welltower Increases Guidance
Welltower came out with a business update for June, and there was some good news on the financial front, particularly in regard to labor cost trends. First, the REIT was able to raise guidance for both its 2023 net income attributable to common stockholders and 2023 normalized FFO on the back of better-than-expected operating results in its SHOP portfolio and a bolstered balance sheet. Operationally, the REIT reported that same-store RevPOR continued to grow at a faster rate than ExpPOR in the first quarter of this year, the fifth consecutive quarter of margin expansion. This was helped in part by agency labor expense as a percentage of total compensation dropping to 3.4% in the first... Read More »Schedule a demo
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