Private Buyers Drove $2.6 Billion Deal Volume in First Quarter

Senior housing and care transaction dollar volume totaled $2.6 billion in the first quarter of 2018—and deals from private buyers made up half of that total, according to a new blog post by Bill Kauffman, senior principal at the National Investment Center for Seniors Housing & Care (NIC).

That breaks down into $1.7 billion of seniors housing, and $900 million in nursing care transactions. The total volume represented a 5% decrease from the previous quarter’s figure of $2.7 billion, and a 45% decrease from the $4.7 billion total volume logged this time last year.

Private buyer activity was significant in the quarter, with $1.3 billion in deals coming from non-publicly traded companies. The first quarter of 2018 was the 19th consecutive quarter where private buyers made up more than $1 billion in closed transaction volume, according to the latest figures.


“For private buyers, that volume was up 9% when compared with the previous quarter. Kauffman wrote. “However, it was down 8% from a year ago in the first quarter of 2017 when volume registered $1.4 billion.”


Meanwhile, public buyers were responsible for $547 million in senior housing and care transactions during the quarter, and institutional buyers totaled $606 million.


Public buyers made up 21% of total volume in the first quarter, an increase from when they represented only 9% of volume this time last year. However, institutional buyers comprised 23% of the quarter’s total volume—a marked decrease from a year ago when they accounted for 55%.

One reason private buyers are gaining ground is that publicly traded companies have had a harder time snagging deals due to their rising cost of capital.

“As private equity is still relatively active in the markets and pricing still remains strong, many public REITs are finding it harder to compete for properties, especially larger portfolios,” Kauffman wrote. “Anecdotally, many deals closed by public REITs include existing operator relationships.”

Written by Tim Regan

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