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 »
A Fearsome Threesome: Welltower, Quality Care Properties and ProMedica Health Deal
We would be lying if we said we were not surprised by the announcement that Welltower will be buying Quality Care Properties for about $2 billion plus assumed debt, that ProMedica Health Systems would be buying the operating assets of HCR ManorCare, and that Welltower and ProMedica would be joint venturing. Strange bedfellows, for sure. While we are sure there was some time pressure to get the news out, we are also sure there were some unhappy analysts who were asleep at 11.58 pm on April 25 when Welltower announced to deaf ears that it moved up its second quarter earnings call to……8 hours later at the bright and early time of 8:00 am the following morning. Looks like management pulled a... 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 »
First Quarter Occupancy Down Again
Seniors housing occupancy levels dropped both sequentially and year over year, but new development continues. While it did not come as much of a surprise, the recently reported occupancy trends from NIC MAP were certainly disheartening. For occupancy at stabilized assisted living communities in the top 100 markets to drop 70 basis points from the previous quarter, and 117 basis points from the year-ago quarter, to 87.9%, it just makes us wonder why there is still so much new development in the ground, and in planning. Everyone thinks they have a better mouse trap, that their building is better, their staff will be better, the programs better….I could go on. The reality, however, is that... Read More »
Pricing “A” vs. “B” Seniors Housing Properties
On Thursday April 12, 2018, we hosted a webinar titled “Pricing “A” vs. “B” Seniors Housing Properties,” where moderator Steve Monroe and panelists Richard Swartz of Cushman & Wakefield, Wayne Kaplan of Premier Senior Living Group and Paul Froning of Focus Healthcare Partners spent 90 minutes detailing the ins and outs of investing in these two very different markets. The panel discussed current pricing of seniors housing properties (broken out between “A” and “B” properties), operating statistics (like occupancy, operating margin and NOI per unit) and cap rates. But they also covered who is buying “A” and “B” properties, and who is selling them, in addition to the risks and rewards of... Read More »Schedule a demo
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