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Skilled nursing transactions set a record in 2022 for the highest number of transactions in a single year, according to data from LevinPro LTC.

SNFs still only represented 41% of the total deals in a year that saw long-term care mergers and acquisitions increase by 17%. There were a total of 527 transactions  in senior living and care on the year, compared with 450 transactions in 2021. 

The $14.02 billion spent on 2022 transactions fell by 27% from the $19.32 billion spent on 2021 transactions, based on disclosed prices, however, the company said.

“The year 2022 was a tale of two years: the first eight months of the year, and then the last four when the 10-year Treasury rate rose above 3.5%,” LevinPro’s Ben Swett said. “To many, that moment in September killed a host of deals and caused plenty of investors and lenders to put their pencils down for the rest of the year.”

Mergers and acquisitions slowed slightly in the fourth quarter, with six fewer transactions than the third quarter (106 transactions in the fourth quarter, down from 136 in the third quarter). Fourth-quarter 2022 transactions also are down from the same period in 2021, when 141 transactions closed.

The fourth-quarter 2022 number “represents the 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,” LevinPro LTC noted.

The largest deals of 2022 were Dwyer Workforce Development’s $590 million acquisition of 50 skilled nursing facilities in Texas and the sale of Stonerise Healthcare’s 17 skilled nursing facilities in West Virginia for an estimated $615 million. 

Skilled nursing deals overall represented just 41% of the year’s transactions, with the senior living segments of active adult, independent living, assisted living, memory care, continuing care retirement communities and affordable senior housing making up the other 59%. In the last four months of the year, however, LevinPro LTC said, the proportion of skilled nursing deals increased to 45% of the year’s sales and the proportion of total sales that were skilled nursing properties rose to 67%. Senior living represented 55% of the total deals in the final four months of the year.
Looking ahead to 2023, almost 40% of skilled nursing facility owners, top executives and other administrators responding to a recent McKnight’sLong-Term Care News survey said that they expect that their companies will sell some or all of their nursing home holdings this year. Almost 34% of the respondents also expect their organizations to acquire some facilities this year.