HCR ManorCare Deal The Future Or A Risk?
Hospitals and post-acute providers have not mixed well in the past, but ProMedica Health System hopes that changes. I keep thinking about the Welltower and ProMedica Health System acquisition of Quality Care Properties and HCR ManorCare. Given today’s valuations, ProMedica may have gotten a bit of a deal with ManorCare’s home health and hospice business. But we are still not convinced that a basically two-state hospital system will benefit from owning skilled nursing and assisted living all over the country. Will the tail wag the dog? Yes, there are a lot of unusual alliances going on in healthcare services today, with pharmacies buying insurers, and insurers buying anything they can get... Read More »
To Build, or To Buy
One thing on the minds of many is that in these heady times in senior care M&A and development, investors are faced with a dilemma: whether to build, or buy (or both). Ben Swett here filling in for Steve Monroe, who is currently wandering around the Argentum conference in San Diego. One thing on the minds of many there is that in these heady times in senior care M&A and development, investors are faced with a dilemma: whether to build, or buy (or both). Buying existing properties comes with its obvious benefits, like cash flow and local brand recognition. But, what a senior wants in a community has changed over the years, meaning that those properties built 10, 20 or 50 years ago... Read More »
The 40-Year Old SNF
The skilled nursing sector is under pressure, especially those facilities built 40 years ago. But buyers continue to see opportunity. There are some people who believe skilled nursing facilities are dinosaurs and will continue to see declines in census and profitability. There are others who believe they are part of the solution to contain healthcare costs and will see census increases in the future as demographics evolve and the SNF bed inventory continues to decline. Within both sides of the debate, there is concern for the large number of skilled nursing facilities that were built 40 years ago. Can they be part of the solution? Is it worthwhile to invest capital in an outdated design?... Read More »
M&A Market Surges
After a very slow March, April seniors housing and care M&A transactions surged to nearly 50 acquisitions, more than double the number in March. In the first quarter this year, we averaged about 26 seniors housing and care acquisitions each month for a total of 77 in the quarter. That was close to what we have been seeing in the past few quarters, so nothing out of the ordinary. That is, until April. Last month we recorded 46 separate acquisitions, or double March’s volume. While it may not be a record, it is awfully close. The number will most likely rise above 50 as more deals come to light. It is too early to say this represents a trend in renewed M&A activity, but other than... Read More »
M&A Values Dip
For the 12 months ended March 31, 2018, assisted and independent living average prices fell, while skilled nursing stayed the same as in 2017. After a record 2017 for assisted living average prices, for the trailing 12 months ended March 31, the prices have come down to earth, a bit. In this most recent period, the average price per unit fell 5% from calendar year 2017, to $210,100 per unit, and the unweighted average cap rate rose to 7.9% from 7.6%. This makes sense given rising interest rates and the continued market headwinds. The independent living market dropped by 9%, to $209,300 per unit, for the 12 months ended March 31, but I would assign less meaning to that because it is a much... Read More »Schedule a demo
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