Senior Housing M&A Takes a Dive in Q2

Though senior housing transaction dollar volume has recently tumbled, some big mergers and acquisitions in the pipeline should cause it to rebound later this year, according to the preliminary data for the second quarter of 2017 from the National Investment Center for Seniors Housing & Care (NIC).

This quarter, $1.4 billion worth of senior care properties changed hands, $873 million of which was made up of senior housing properties and $573 million of which was made up of nursing care properties. This is strikingly lower than last quarter, when $4 billion worth of senior housing traded hands and $613 million worth of nursing care properties were acquired.

Overall, total senior housing and care transaction volume in the second quarter of 2017 was 69% less than the first quarter’s volume of $4.6 billion and 45% less than one year ago when it hit $2.6 billion in the second quarter.


That’s the lowest total volume for senior housing deals since the first quarter of 2012.

The lower volume was in part due to a large decrease in institutional buyers, NIC Senior Principal Bill Kauffman wrote in a blog post. Last quarter, much of the total volume was driven by two closed acquisitions from private equity firm Blackstone, which acquired 64 senior living properties from from HCP (NYSE: HCP) for $1.125 billion and picked up the Senior Lifestyle portfolio from Welltower (NYSE: HCN) for $747 million.

“One could argue that when large deals close in a given quarter, it will be hard to beat and/or match that trend in the following quarter. And that’s what we had in the second quarter,” Kauffman wrote. “However, let’s also put the quarter in perspective with the trend over the past few years and mention, again, it was relatively weak.”


Another reason for the slowdown is continued weak volume from the public buyers, he notes.

Despite the slowdown, volume should pick up by the end of the year as some high profile deals begin to close.

“The announcement of the merger between Sabra and Care Capital Properties is one deal that could move the needle this year on volume if the properties transact before year-end,” Kauffman told Senior Housing News. “Also, another large one that was announced in June but not closed was the Columbia Pacific Advisors and Hawthorn Portfolio deal.”

Written by Tim Regan

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