NEW CANAAN, CT – April 13, 2021 – The number of publicly announced seniors housing and care acquisitions in the first quarter of 2021 fell to just 77 deals, based on new acquisition data from Irving Levin Associates. This represents a 39% decrease from the 127 transactions in the previous quarter and is 26% lower than the 104 deals made public in the first quarter of 2020. Also, the $1.49 billion spent on the first quarter transactions dropped by 43% from the previous quarter’s total of $2.62 billion, based on publicly disclosed prices. Compared with the first quarter of 2020, when buyers spent $2.29 billion on seniors housing and care properties, dollar volume was 35% lower.
“Dealmakers unfortunately had to pause much of their work during the spring and summer of 2020, tabling many transactions and bringing very few properties to market. The latter in particular created a significant gap in the transaction pipeline that resulted few deals ready to close by the first quarter of 2021,” stated Ben Swett, Editor of The SeniorCare Investor. “There are also ongoing issues in obtaining financing and third-party approvals in a timely manner, and buyers and sellers are still not always seeing eye to eye on pricing.”
Portfolio deals were still relatively prevalent in the first quarter, with 18 sales of three properties or more announced. While that trails the fourth quarter’s 26 portfolio sales, it far surpasses the eight recorded in the third quarter and 10 in the second quarter during the height of the pandemic. Those portfolio sales in the first quarter accounted for more than 115 properties. Two of the three largest deals were in the skilled nursing sector, including Larry H. Miller Group of Companies’ acquisition of Advanced Health Care Corporation and its 20 post-acute care facilities in eight states. White Oak Healthcare REIT announced the largest seniors housing deal of the quarter with its acquisition of 16 properties from Healthpeak Properties for $230 million. Discovery Senior Living will take over management of the portfolio from three different in-place operators.
In terms of deals, skilled nursing was far less popular than seniors housing, representing just 32% of the quarter’s sales compared with 49% in the fourth quarter of 2020. “Federal and state relief has stabilized many skilled nursing facilities’ bottom lines. But some of that aid is already coming due, and with the successful distribution of the COVID-19 vaccines at facilities across the country, sellers and buyers should be ready to move forward with deals soon.” added Swett. Once again, assisted living and memory care made up the plurality of the seniors housing deals, or 47%, followed by independent living with 6.5% of the share, affordable seniors housing with 5%, and active adult and CCRCs each accounting for 4% of the quarter’s deals.
All long-term care M&A deals dating back to 1993 can be accessed on the Deal Search Online database and can be purchased via a site license. All quarterly results are published in The Health Care M&A Report for all 13 sectors of health care, which is part of the HealthCareMandA.com. In addition, annual results of the seniors housing and care acquisition markets were published this year in the 26th Edition of The Senior Care Acquisition Report. The comprehensive report has more than 300 pages of transaction details and valuation statistics. For information, or to order the reports, call 800-248-1668. Irving Levin Associates was established in 1948 and has headquarters in New Canaan, Connecticut. The company publishes research reports and newsletters, and maintains databases on the healthcare and seniors housing M&A markets.