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 »
Senior Care M&A Spending Hits Highest Level Since 2014
Total dollar volume did not break any records in 2019, but it was still the third-highest annual total ever recorded, and the highest since 2014 according to our just-published Senior Care Acquisition Report, 25th Edition. And that was without a single deal in the top-16 prices seen in the sector (2006 and 2014 had two and four, respectively). In fact, there were only two transactions valued above $1 billion: Ventas’ $1.8 billion purchase of Le Group Maurice’s Canadian seniors housing portfolio and KKR’s $1.75 billion acquisition of the Benchmark Senior Living portfolio from Welltower. However, the 2019 M&A market was larger and busier than people think, and that is... Read More »
Assisted Living Values Break Record
With cheap and abundant capital in hand, and plenty of brand-new properties built during the recent construction boom hitting the M&A market in 2019, buyers pushed assisted living values to the highest per-unit average ever recorded. The average price for assisted living communities rose to $248,400 per unit, or 33% higher than 2018’s average of $186,400 per unit and 12% higher than the previous high of $221,250 per unit in 2017, according the the Senior Care Acquisition Report. The median price per unit also reached a new high of $233,183 per unit, or 54% higher than 2018’s median and 8% higher than 2017’s. So, what explains this significant jump? First, investor interest in seniors... Read More »Schedule a demo
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