May’s M&A Meltdown
The M&A statistics are in for May, and it was a doozy. Only 19 seniors housing and skilled nursing deals were publicly announced during the month, nearly half of which coming from the first quarter earnings reports of several public companies. Without those, we would have barely made it to double digits. You have to go back to July 2017 for such a low monthly total, when 16 sales were disclosed. Back then, however, the month was followed by a strong August (27 deals) and September (35). We’re not as hopeful for such a comeback this time. Another facet of May’s M&A activity was that nearly all of the deals were either closed in the first quarter or were all-but-completed... Read More »
Skilled Nursing Values Were Strong Before COVID-19
Leading up to the onset of the COVID-19 pandemic, skilled nursing facilities were going through their own challenges of falling census and shortening lengths of stay, low Medicaid reimbursement, aging physical plants, a labor squeeze and the possibility of a CMS correction after the implementation of PDPM. What some wouldn’t give to go back to those kinds of problems. However, values were near an all-time high, averaging $93,000 per bed in 2019 according to the 25th Edition of The Senior Care Acquisition Report, and falling slightly to an average of $92,800 per unit in the four quarters ended March 2020. That high average was the result of investors acquiring... Read More »
Where Will Independent Living Values Go?
Here’s the good news and the bad news regarding the independent living market today. The good news is that the fundamentals of the sector were stronger than ever as recent as this March, with values nearing a peak, occupancy consistently above 90% nationally, rents staying strong, and the labor problems largely avoiding IL communities. The bad news is that move-ins may be delayed for months, a recession may make selling and moving out of one’s home (and into an IL community) less feasible, and the socialization benefit of these communities may change significantly for some time. Anecdotally, we do hear of move-ins continuing at a steady pace, depending on the locality and... Read More »
Where Were Assisted Living Values At Their Pre-Pandemic Peak?
Seniors housing values were at (or very close to) a peak by the beginning of March. Then, COVID-19 shut down the country, and those communities were forced to shut their doors, halt move-ins, and deal with the pandemic and their residents as best they could. Keeping those seniors safe and healthy is, of course, the first priority. But the drop in occupancy and cash flow is also a serious matter (how else can these communities stay open to care for seniors if they are not profitable, after all?) and may lead to a correction in values. Just how large of a correction, we cannot be sure, but we do know where values were right before the pandemic hit. According... Read More »
Q1 M&A Activity Falls Below 100 Deals
For the first time since the first quarter of 2018, quarterly seniors housing and care deals dropped below 100 in Q1:2020, to 93 deals. Averaging 31 deals per month is not too shabby, but compared with the red-hot M&A market of 2019, when 450 deals were publicly announced and likely over 600 were actually completed, it is a significant decline. Not surprisingly, the COVID-19 pandemic had a large part to play in the slowdown, but not as much as you may think in the first quarter. After all, large swaths of the U.S. economy were not shut down until mid-March, and deals that closed after that were all-but-completed by the time businesses shut their doors. They just needed a little nudge... Read More »Schedule a demo
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