NEW CANAAN, CONN. (PRWEB) JULY 17, 2023 – The number of publicly announced seniors housing and care acquisitions in the second quarter of 2023 rose to 110 deals, based on new acquisition data from LevinPro LTC. This represents an 11% increase from the 99 transactions disclosed in the first quarter of 2023, but a 25% decline from the 147 deals in Q2:22. In addition, the $1.29 billion spent on Q2:23 transactions fell by 4% from the $1.345 billion spent on Q1:23 transactions and by 63% from the $3.5 billion spent in the year-ago second quarter, based on disclosed prices.
“Despite spiking capital costs and liquidity issues in the debt markets, buyers and sellers closed more transactions in the second quarter” stated Ben Swett, Editor of The SeniorCare Investor. “Sellers compromising or being more realistic on price helped boost transaction activity, but deals are still a lot harder to get done than one year ago.”
The 110 transactions recorded in Q2:23 represents the second-lowest quarterly deal total since the first quarter of 2021, when 85 deals were publicly announced, and shows the impact of high interest rates on the M&A market. There were just under 260 properties involved in Q2:23’s deals for a property-per-deal ratio of 2.3, down from the 2.8 property-per-deal rate from Q1:23. Assisted living deals made up the plurality of Q2:23 deals, accounting for 42% (equal to the Q1:23 share), followed by skilled nursing at 36%. Independent living deals made up 10% of the quarter’s total, CCRCs took a 7% share and affordable senior apartments accounted for 6. There was only one active adult deal publicly disclosed in the quarter.
There were four transactions with more than 10 properties in each (down from nine in the first quarter of 2023), and 23 total deals with three or more properties, the majority being skilled nursing deals. Looking at monthly M&A activity, dealmaking started strongly in April with 38 transactions, fell back in May to 26 deals, and took off in June with 46 transactions.
“The threat of at least one more interest rate hike, let alone two, will likely keep more banks from financing M&A transactions in the senior care market, making deals harder to close and further lowering values for properties,” added Swett. “However, all-cash buyers will still be well positioned to acquire value-add or distressed properties from highly motivated sellers.”
All long-term care M&A deals dating back to 1993 can be accessed on the LevinPro 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 LevinPro HC. In addition, annual results of the seniors housing and care acquisition markets will be published this year in the 28th Edition of The Senior Care Acquisition Report. For information, or to subscribe, call 800-248-1668. Irving Levin Associates was established in 1948 and has offices in New Canaan, Connecticut, and North Bethesda, Maryland. The company publishes research reports and newsletters, and maintains databases on the healthcare and seniors housing M&A markets.