The slowdown in senior living M&A continued into the third quarter of this year, representing the slowest period for industry deal-making since 2021.
That’s according to an Oct. 16 M&A update from Irving Levin Associates. According to the company’s latest data, industry players inked just 115 deals in the third quarter of 2023, totaling an 18% decrease compared to the third quarter of 2022, when there were 140 publicly announced deals. The latest total also represents a 4% decrease over the 120 transactions seen in the second quarter of this year.
All told, the industry is seeing the lowest number of new public transactions since the third quarter of 2021, when there were only 111 deals announced.
While there was a “healthy” transaction level for the quarter, LevinPro noted there was a decline in the number of large portfolio deals, with only nine deals that involved five or more properties. A year ago, there were 17.
Total transaction volume is trending down as well, with $700 million trading hands in 3Q23, a decrease from the $1.29 billion spent in the second quarter and $3.87 billion that changed hands in the third quarter of last year, according to Irving Levin’s data.
The average number of properties per deal registered at 2.3, with 265 properties involved in the third quarter, according to the data. in deals remained around the same as Q2 this year at 265.
Other recent acquisitions have included Tutera’s acquisition of 10 former Enlivant properties to beef up its senior housing portfolio, and Phorcys Capital Partners buying a 114-unit senior living community.
High capital costs and a still-too-wide bid-ask spread have primarily caused the slowdown of M&A in the quarter. But there is some hope ahead for 2024 with the potential of “gangbuster” amounts of M&As driven by pent-up demand for sales.