News Column

Senior Care M&A Activity at Record Levels According to Acquisition Data from Irving Levin Associates, Inc.

July 17, 2014



NORWALK, Conn.--(BUSINESS WIRE)-- The seniors housing merger and acquisition market, which includes skilled nursing, assisted living, memory care and independent living, continues to strengthen, setting transaction volume records in back-to-back quarters. (View full video: http://www.levinassociates.com/pr2014/pr1407scarmy.) In the second quarter of 2014, there were 60 publicly announced senior care M&A transactions, the highest volume ever during a second quarter and up from 56 acquisitions in the second quarter of 2013. In the first half of 2014, there were 123 announced senior care acquisitions, up 23% from the first half of 2013 when there were 100 M&A deals, which was considered to be a very active year. “This level of activity is unprecedented in the seniors housing and care market,” stated Steve Monroe, editor of The SeniorCare Investor newsletter. “More transactions are getting done in six months than in the entire years of 2008, 2009 and 2010.”

The dollar value of the announced senior care acquisitions has also been rising. In the first half of 2014, the total value of the transactions was $10.8 billion, compared with $4.5 billion in the first half of 2013, representing a 137% increase. In the second quarter alone, with $5.2 of deal value, the total was 78% greater than the second quarter of 2013. “The capital inflow to the seniors housing and care sector continues to grow as more investors view the market not only as a strong real estate sector with above-average returns, but also one that has proven to be recession resistant,” continued Monroe.

Capital is still relatively cheap, and more lenders and investors have been entering and re-entering the seniors care market. With that competition has come increasingly aggressive lending terms as banks and other lenders vie for transaction volume. “During the real estate crisis of The Great Recession, some lenders just left the business, but most have now returned,” stated Monroe. In addition, there has been an increase in new players in the acquisition market, who are able to take advantage of the low cost of capital available. In particular, health care REITs, especially the smaller non-traded REITs, increased their M&A activity by more than 50% in the first half of 2014 compared with the first half of last year. Combined with a rise in private equity groups looking to cash in on the relatively high real estate returns, the total supply of capital for senior care acquisitions has now approached that in the last senior care bull market of 2006 and 2007.

“As long as interest rates remain low, we see no end to the acquisition volume. The only dark cloud on the horizon could be the increasing pace of new development if all the assisted living and memory care communities that are being discussed actually get built,” Monroe concluded. “That will be when the cracks begin to appear in this bull market.”

All relevant data for 2013 and prior years appear in The 2014 Senior Care Acquisition Report, Nineteenth Edition, which contains statistics on the skilled nursing facility, assisted living and retirement housing merger and acquisition market, including prices per bed or unit, capitalization rates and income multiples, in more than 200 pages. The report also includes transaction information on each of the 225 publicly announced seniors housing and care acquisitions in 2013 (a new record), plus the publicly announced home health care and hospice acquisitions in 2013. The 2014 Senior Care Acquisition Report, Nineteenth Edition, may be purchased for $595. The twentieth edition will be available in March 2015. For more information, or to order the report, call 800-248-1668. Irving Levin Associates, Inc. was established in 1948 and has headquarters in Norwalk, Connecticut. The company publishes research reports and newsletters, and maintains databases on the health care and senior housing markets.

* To receive this press release via email, send a message to pressreleases@levinassociates.com



Irving Levin Associates, Inc.

Stephen M. Monroe, Partner

Phone: 203-846-6800

Fax: 203-846-8300

Source: Irving Levin Associates, Inc.


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