Waiting To Sell, Or Buy, Or Lend
If census has indeed bottomed in the senior care industry, investors may still want to wait for several months of sustained growth before buying again. Although “consensus” on anything is dangerous to rely on, it does seem that either we have hit that bottom of the occupancy plunge, and if not, we are very close to it. After a year of turmoil and uncertainty, a rising national occupancy level for seniors housing will be quite a relief. What we are hearing is that some lenders want to see at least three months of consistent, increasing census for their new loans, and we suspect some buyers will want to see that as well. I guess you could say they want to see it before they will believe it.... Read More »
Is Home Care The Answer?
The move toward more home health is upon us, and it is time for providers to engage. If President Biden’s $2.1 trillion “stimulus” bill goes through, you all have heard about that $400 billion for home and community-based services. Not $400 million, but billion. When nearly 20% of a so-called stimulus package is going towards home and community-based care, well, forgive me for getting nervous. It is the progressive political/academic/union complex trying to make a major change in care for the elderly, but with borrowed federal funds. We know that Medicaid doesn’t work well for most nursing homes, and that most assisted living providers want to remain private pay. That means there is... Read More »
The Divergence of the “A” vs. “B” Communities
Prior to the pandemic, investment demand was high for the so-called “value-add” properties, with the potential for much higher returns than for “A” properties. With crashing occupancy all around, did this dynamic change, and will the disparity between “A” and “B” values grow wider post pandemic? The COVID-19 pandemic hit the seniors housing industry hard, and while no community was immune from the difficulties, there are probably going to be winners and, unfortunately, losers coming out of this. Lower acuity communities appear to have performed better in the last year, and properties with strong existing census had a leg up going into the pandemic. But in 2020, buyers seemed to have... Read More »
Senior Care M&A Tanks In Q1
After a strong fourth quarter, senior care M&A activity cooled off this winter. We thought that after 59 seniors housing and care M&A transactions were announced in December 2020, a monthly record, we had returned to some kind of “normal” in terms of dealmaking. Well that just didn’t happen in the first quarter of 2021, when despite widespread vaccination of the senior care population investor activity cooled to just 77 publicly announced deals. That is just a preliminary total but is well off Q4’s total of 127 deals. M&A in the skilled nursing sector especially slowed down, accounting for just 32% of the deals announced during the quarter. But it makes sense. If various... Read More »
Getting Very Mad
Academics say that PE firms are responsible for the deaths of up to 20,000 Medicare patients over 12 years. Reckless. I don’t know about you, but I am really getting mad at what I am reading. Four academics just came out with a research paper on the impact of private equity on the skilled nursing industry. Backed up by equations that few of us would understand, they concluded that private equity firms are responsible for up to 20,000 deaths of Medicare patients in nursing homes over a 12-year period. Really? The study included 128 deals for 1,674 facilities and 136 unique PE firms that acquired nursing facilities. Hmm. 136 “unique” PE firms. Even over 12 years that seems like a stretch. I... Read More »Schedule a demo
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