Nursing homes dragged down overall senior housing transaction volume in 2017, according to preliminary data from the National Investment Center for Seniors Housing & Care (NIC).
Nursing care transactions volume fell 10.8%, from $7 billion in 2016 to $6.2 billion in 2017. By contrast, seniors housing increased 4.5% percent, rising to $7.9 billion in 2017 from $7.5 billion the year before.
In the fourth quarter of 2017, seniors housing and nursing care deals totaled $2.1 billion, compared with $3.4 billion in the fourth quarter of 2016. It was also the lowest quarterly volume since the second quarter of 2013, and represented a 59% dip from the 2017 third quarter, which had volume of $5.1 billion.
“A large portion of that $5.1 billion in the third quarter was the $2.1 billion Sabra acquisition of Care Capital Properties,” NIC senior principal Bill Kauffman wrote in a blog post about the data. “That $2.1 billion transaction was a main driver of the comparison decrease in nursing care volume in the fourth quarter, as nursing care was down 64% from the third quarter.
Smaller deals dominate
The number of deals closed fell by 17%, with 446 deals closed in 2017 — driven in part by a drop in portfolio transactions. In 2016, 109 of 538 transactions were portfolio, while 429 were single-property deals. In 2017, 90 transactions of the 446 deals were portfolio.
The number of single-property deals also dropped to 356 in 2017. And though the single-property transactions market has been strong, with 16 straight quarters of more than 100 closed deals, the fourth quarter of 2017 had only 84 closings according to preliminary data.
But in terms of deal size, smaller transactions had the upper hand. Of all deals closed in the fourth quarter, 95% were $50 million or less.
Larger deals, by contrast, have significantly decreased.
“Over the past couple years, as the public buyer type has become less representative of the overall volume, we have seen a significant decrease in large deals of $500 million or more,” Kauffman wrote. “In 2015, we saw 10 transactions of $500 million or more and only nine transactions combined in 2016 and 2017.”
Written by Maggie Flynn
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