Senior Care M&A Tanks In Q1

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 »
Bifurcation Between Stabilized and Non-Stabilized SNFs Grew in 2020

Bifurcation Between Stabilized and Non-Stabilized SNFs Grew in 2020

In some ways, the pandemic only rubbed salt in the wound in terms of occupancy across skilled nursing facilities nationwide. Average census across the skilled nursing industry was already languishing between the mid- to low- 80% range before the pandemic temporarily shut the doors to many facilities, paused elective surgeries and sent more post-acute patients home to recover. These problems adversely affected the older, mostly-Medicaid facilities and were only made worse in 2020.   That means digging out from the pandemic will be a tougher assignment, and buyers paid accordingly in 2020, averaging $55,300 per bed for non-stabilized facilities reporting occupancy lower... Read More »
Senior Care Leading Indicators

Senior Care Leading Indicators

There has not been a lot of good news, but given some leading indicators, the next development boom may be a bit further out than we had expected four months ago. Our focus for the past 12 months has been on the coronavirus pandemic and what it has done to seniors housing and care occupancy rates. We are also on record as stating that getting back to pre-pandemic census levels may take up to four years, partly because we expect development to ramp up again when developers eye the post-2025 demographics. But something else has been happening that may keep some builders away. First, the 10-year treasury rate has more than doubled in the past seven months. Yes, 1.36% is still attractive, but... Read More »
Senior Care M&A Tanks In Q1

Ventas Census Hits Low

Things will definitely start to get better as the vaccine finishes its roll out in senior living communities, but even more ground will have to be made up as a result of the continued deterioration in census in the past few months. Ventas, which just released its fourth quarter and full-year 2020 results, has not been immune to these declines, yet they see the light at the end of the tunnel.  On a same-community basis, the senior housing operating portfolio (SHOP) occupancy level dropped by 870 basis points in the fourth quarter compared to the same quarter last year, to a low of 79.6%. This is a total of 377 communities. But when the Canadian communities are removed (68... Read More »
Buyers Paid Premium For Strong Operations in 2020

Buyers Paid Premium For Strong Operations in 2020

In 2020, there was yet again a perfect correlation between the average price per unit paid for seniors housing communities and their operating margins. Throughout 2020, as occupancy and cash flow at senior care facilities dropped and costs of financing rose, we wondered exactly how the pandemic would affect the pricing of these assets. Would it have a disparate effect on skilled nursing versus seniors housing properties, older properties versus new ones, or on stabilized facilities versus non stabilized. We are almost done compiling all these statistics in the 26th Edition of The Senior Care Acquisition Report, but we wanted to highlight a historical trend that continued even through... Read More »
Diversified Healthcare Trust Update

Diversified Healthcare Trust Update

Diversified Healthcare Trust is feeling the pain that most of the REITs also have been feeling: census is still dropping. Its senior housing operating portfolio (SHOP) posted a 380-basis point decline in census in the fourth quarter. While not good, the progression was worse. It started with a 70-basis point drop in October, growing to 130 basis points in November and then a plunge of 180 basis points in December alone. And this when 93% of its SHOP communities, the vast majority managed by Five Star Senior Living, are open for new admissions.  What this means is that just because you are open for business, it does not necessarily mean people will move, even if it is safer... Read More »