Mergers and acquisitions in senior living and skilled nursing in the first quarter included just 98 transactions. That’s 13% fewer than the 112 transactions that occurred in the fourth quarter of 2022, according to recent data from LevinPro LTC. This amount was the lowest quarterly deal total since the first quarter of 2021, when 85 deals were publicly announced, according to the company.
Mergers and acquisitions have dropped significantly from the first quarter of last year. At this time in 2022, the senior housing and care sector marked 114 deals for the quarter. That amount is 33% more transactions than this year.
“Buyers have taken a big step back from acquisitions in light of spiking capital costs and liquidity issues in the debt markets,” Ben Swett of Irving Levin Associates said in a statement. “Deals are a lot harder to get done, and most that close feature value-add assets that trade at low per-unit prices.”
In the first quarter, nine transactions had more than 10 properties each and 21 total deals had three or more properties each, split approximately evenly between skilled nursing and senior living transactions.
The breakdown of first quarter deals:
- Assisted living, 42%
- Skilled nursing, 32%
- Active adult, 9%
- Independent living, 7%
- Affordable senior housing, 6%
- Continuing care retirement / life plan communities, 4%.
“As lending issues plague the senior care industry and some major loan defaults are potentially around the corner, deal activity and values will take a hit,” Swett said. “However, we will likely see all-cash buyers make opportunistic acquisitions throughout the year.”
