Lenders are bullish on the skilled nursing industry these days, according to Evans Senior Investments President and CEO Jason Stroiman.
“I’ve personally been selling skilled nursing for over 17 years, and never seen a market like this,” he said in a webinar Wednesday. “In a very counterintuitive way, COVID has transformed the industry … It defies logic, but deals are closing.”
He said the data shows a $17,000 increase in price per bed in skilled nursing from 2020 to 2021.
According to Stroiman, capital largely is sitting ready to be deployed in the industry. Acquisition financing remains abundant, and interest rates are at a record low, he said. Banks are willing to underwrite loans as if occupancy is stabilized rather than on actual percentages right now, Stroimna siad.
It’s a good time for regional groups to either expand their businesses or try to sell off properties, he added.
“Buyers are willing to pay prices that I certainly haven’t seen in 17 years of doing this,” Stroiman said.
ESI Director Kris Lowes warned, though, that the industry is “very volatile.”
In the near-term, the rise of the delta variant poses serious threats to any return to normalcy, especially with a national average of only 60% of staff vaccinated, according to Lowes.
Staffing shortages are a long-term threat to the industry, he said. Operators are going to have to increase wages to hire and retain workers, which will also eat at the bottom line, he said.
