Senior Care Acquisition Market Bursts With Activity

NORWALK, CT – July 14, 2005 - The market demand for senior care facilities is the strongest it has been since the mid-1990s, and with buyers paying premium prices, owners of high quality portfolios are flooding the market with their properties, according to a report from Irving Levin Associates, Inc.

In the first half of 2005, there have been 53 publicly announced acquisitions of senior care properties or companies, compared with just 34 in the first half of 2004. But the real story is the number of large transactions, both completed and currently on the market. So far this year there have been six senior care acquisitions valued at more than $100 million each, compared with just three in the year-ago period. In addition, there are five seniors housing portfolios on the market worth more than $1.5 billion in total, and 10 skilled nursing facility portfolios worth nearly $1.0 billion, plus the auction of Beverly Enterprises which is expected to top $2.0 billion alone.

“In the 20 years I have been covering the senior care acquisition market, I have never seen the market this active with so many large portfolios available for sale. And the big difference compared with the 1990s is the high quality of many of these portfolios,” commented Stephen M. Monroe, partner and editor of The SeniorCare Investor. “The record-setting cash flow multiples on the higher quality portfolios is driving the supply in the market, while yield-hungry investors and newcomers to the seniors housing area are driving the demand,” continued Mr. Monroe.

In 2004, average skilled nursing bed prices jumped 40% from 2003, while average assisted living unit prices increased by 31% year-over-year. “The strong senior care acquisition market has continued, especially in the assisted living and independent living sectors. A few years ago, per-unit prices of $200,000 were uncommon, but now we are heading toward $300,000 in a few cases,” stated Mr. Monroe. “For traditional real estate investors, despite the recent price increases, the seniors housing market just looks cheap compared with other real estate classes,” concluded Mr. Monroe.

For more information on The Health Care M&A Report, or for a subscription to any Irving Levin Associates publication, call 800-248-1668. Irving Levin Associates, Inc., established in 1948, has headquarters in Norwalk, CT and is online at www.levinassociates.com. This privately held corporation publishes research reports and newsletters, and maintains merger and acquisition databases, on the health care and senior housing markets.

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