NIC: Hunger Grows for Skilled Nursing Assets

While transaction volume dwindled among seniors housing and care asset classes during the last quarter of 2015, nursing care remained strong, solidifying its position as an emerging market sweetheart.

Quarterly data from the National Investment Center for Seniors Housing & Care (NIC) revealed that skilled nursing was still a popular asset class during the last few months of 2015.

Sales volume showed a market that was still highly active at the end of the year, though dollar volume slowed significantly during that time, according to preliminary data released by NIC. Overall, $2.8 billion in seniors housing and care properties sales closed during the fourth quarter of 2015, compared to $3.3 billion in the third quarter of 2015 and $4.4 billion during the fourth quarter of 2014.

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Seniors housing properties totaled $1.5 billion of transactions volume during the fourth quarter, down 37% from the previous quarter and 43% from a year ago.

The bright spot in the data was the rising demand for nursing care, which totaled $1.3 billion during the fourth quarter, a 36% rise from the third quarter. On a rolling four-quarter basis, nursing care volume was up 40% from the fourth quarter of 2014, reaching $6.6 billion compared to $4.7 billion a year ago.

With $100 billion of skilled nursing assets currently in private hands, predictions of consolidation within the skilled nursing industry could be coming to pass with a flurry of new transactions. Signs suggest the asset class could remain hot throughout 2016.

“The jump in nursing care transactions volumes may reflect the changing landscape in the sector, in which some owners are selling properties to strategic buyers who are working to capitalize on current market dynamics and opportunities,” Beth Mace wrote Wednesday in a blog post about the data.

The second half of 2015 saw a steep drop-off in total sales volume, reaching $6.1 billion between the third and fourth quarter combined, less than half of the $12.7 billion in sales during the first two quarters of the year. Despite M&A deal values tapering off at the end of the year, 2015 reached record levels with 354 publicly announced acquisitions, according to recently released data from Irving Levin Associates.

Written by Amy Baxter

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