Among other things, the COVID-19 pandemic has slowed the pace of mergers, acquisitions and other dealmaking activities. But that may soon change.
Although we don’t have a vaccine for this dreadful virus, there’s growing optimism that things are returning to normal, or at least to a “new normal.”
To get a sense of how senior living might reboot, you could do worse than reading Lisa McCracken’s recent piece in Ziegler’s weekly e-newsletter.
McCracken, who is the firm’s senior vice president of senior living research and development, predicts that “affiliations, mergers, acquisitions and dispositions will pick up pace again and in many cases, will be accelerated.”
Her bullish assessment is based on three key drivers: distressed communities, CEO retirements and a growing awareness of the benefits of scale. I couldn’t agree more.
As things gear up, I think we may see a bifurcation of sorts, one that separates the short- and long-game players.
Many in the first group have been whiplashed — or worse — by the pandemic. These operators have struggled to soldier on in the face of rising costs and diminished revenues. Frankly, quite a few have had more than their fill. They are ready to get out and get on.
Those playing the long game have had to deal with these challenges as well. But they have the willingness / ability to stay put — and possibly realize a very nice return on the investment down the road.
Mix those two groups together and you basically have ideal dealmaking conditions — perhaps on a size and scale that has never been seen before.