Seniors Housing and Care M&A Activity in Q4:2019 Helps Set Full-Year Record, According to Data from Irving Levin Associates, Inc.
The number of publicly announced seniors housing and care acquisitions in the fourth quarter of 2019 topped 100 transactions for the seventh quarter in a row, with 110 total transactions announced. Based on disclosed prices, the dollar value fell to $3.6 billion, down 37% from the third quarter of 2019, according to data from Irving Levin Associates, Inc.
NORWALK, Conn., Jan. 16, 2020 /PRNewswire-PRWeb/ -- The number of publicly announced seniors housing and care acquisitions in the fourth quarter of 2019 topped 100 transactions for the seventh quarter in a row, with 110 total transactions announced, based on new acquisition data from Irving Levin Associates. This represents a 7% jump from the 103 transactions announced in the third quarter of 2019 and a 5% increase from the 105 in the fourth quarter of 2018. It also brings the year's transaction total to 447 deals, a full-year record and 5% higher than 2018's total of 426 deals. However, buyers committed fewer dollars to Q4 deals, spending a total of $3.6 billion on seniors housing and care deals in the fourth quarter, 37% lower than the $5.7 billion in Q3:19. However, spending in the fourth quarter of 2019 was 21% higher than the Q4:18 total of $2.96 billion. "Cheap and abundant capital continue to fuel this red-hot M&A market," stated Ben Swett, Editor of The SeniorCare Investor. "This activity comes at a time of stubborn industry headwinds, such as labor availability and cost, persistent discounting and stagnant occupancy."
As per usual, private senior care providers made up the majority of buyers, counting for nearly 50% of all Q4 acquisitions. REITs and real estate investment firms made 27% of the deals, and 10% were announced by private equity firms, but these companies are often secretive about their purchases, so those proportions are likely low. Welltower was the most prolific buyer, thanks mostly to its third-quarter earnings report, with five deals. The Ensign Group announced four deals, a solid number for them, and Kayne Anderson closed two. The largest deal, by disclosed price, was announced by Healthpeak Properties and consisted of 13 CCRCs previously owned by Brookdale Senior Living.
Seniors housing deals, which include independent living, assisted living, memory care, CCRC and active adult properties, accounted for the vast majority of deals this quarter, at 69% compared with 58% last quarter. These deals also accounted for the top-16 publicly disclosed prices in the fourth quarter. "The dominance of seniors housing deals in the fourth quarter M&A market is not surprising given that skilled nursing owners are still watching how the implementation of PDPM will affect operations." continued Swett. "If the new reimbursement rule proves not to be revenue-neutral, a revision downwards by CMS may further complicate investing in the skilled nursing business."
SOURCE Irving Levin Associates
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