The splashiest skilled nursing deal of the year portends better things to come for the industry as a whole, according to the leader of one prominent senior living real estate investment trust (REIT).

National Healthcare Investors (NYSE: NHI) CEO Eric Mendelsohn touted the recent $1.95 billion acquisition agreement between Welltower Inc. (NYSE: WELL) and Quality Care Properties (NYSE: QCP) as proof that skilled nursing still holds value for the senior living industry.

Under that deal, Welltower will own the real estate of major post-acute provider and former QCP tenant HCR ManorCare in a joint venture with ProMedica, a non-profit hospital system. The move marked a major move into the post-acute marketplace for ProMedica, as well as a bet by Welltower that skilled nursing facilities can succeed with big-hospital backing.

“Our takeaway is that skilled nursing still has a place on the senior housing spectrum,” Mendelsohn said on his company’s first-quarter earnings call Tuesday. “We continue to see interesting opportunities for well-funded, low-leveraged REITs like NHI.”

He also said The Ensign Group’s (Nasdaq: ENSG) strong first-quarter 2018 earnings were gratifying to see. The Mission Viejo, Calif.-based provider boosted its skilled nursing services income by 45.3% from the first quarter of 2017, and also saw occupancy gains in both same-store and recently acquired facilities.

The ProMedica-ManorCare deal also came up on Omega Healthcare Investors’ (NYSE: OHI) first-quarter earnings call Tuesday morning, when CEO Taylor Pickett was asked whether or not the transaction marked the start of a trend.

Pickett declined to declare it the beginning of a major industry-wide shift, but instead classified the deal as an interesting development worthy of further observation.

“This is the first big entree of a hospital system into the facility-based business — we’ve seen them in hospice and home care, kind of the nurse-level delivery part of the system,” Pickett said. “You’re asking the right question in terms of monitoring where things head over the next decade, and we may see more of it.”

Written by Tim Regan and Alex Spanko