The skilled nursing and seniors housing transactions market may have cooled down a bit at the end of the first financial quarter after a record-breaking end of 2021.
The number of publicly announced deals in the first quarter of 2022 fell to 127 deals compared to 140 transactions in the previous quarter – amounting to a 9% decrease, according to new acquisition data from LevinPro LTC.
Dealmakers spent $3.87 billion on first quarter transactions in the space, a 2% decline compared to the previous quarter’s total of $3.94 billion.
Still, the number of deals was still considerably higher than in years past, according to the data. In the first quarter of 2021 there were only 84 publicly announced deals.
Some states saw record-setting per bed pricing for skilled nursing transactions in 2021, and while federal funding fueled transactional activity in the sector, some in the industry believe pricing may have peaked.
“I don’t think that the values are going to continue to appreciate at the rate that they did during Covid because that was really a function of increased reimbursement,” Blueprint Co-Founder and newly named Chief Vision Officer Jacob Gehl recently told Skilled Nursing News. “The real question is do they hold at this number or do they start to trickle back down.”
In the first quarter of 2022 there were 35 total portfolio deals with at least three properties per deal – more than any quarter since before the pandemic. There were 12 deals with 10 or more properties, according to the data.
An undisclosed east coast owner operator acquired 17 facilities in Ohio for $145 million, or $72,500 per bed.
As the federal government continues to ramp up its rhetoric regarding private equity investment in skilled nursing amid President Biden’s proposed nursing home reform, the data continues to show that private equity may not be the biggest buyers in the space.
Private equity buyers made up 13% of overall buyers, but accounted for just 4% of the quarter’s skilled nursing deal activity. Private equity, private real estate investment firms and real estate investment trusts (REITs) made up 34% of the seniors housing and skilled nursing transactions.
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