The Long-Term Care M&A market seemed to hit the doldrums, with 22 transactions in September and just 20 transactions in October. The sudden slowdown left us wondering if this could be the new norm after a red hot couple of years, where the sector averaged about 30 deals per month in 2015, and settled slowly down to 26 deals per month, through the end of October 2016.
So the first week in November came as quite a shock. In the first two days of the month, two of the three largest transactions of the year were announced, along with a $337 million deal for 31 skilled nursing facilities. Sixteen transactions in this sector were announced in the first four days of November, 80% of October’s total.
On November 1, Blackstone Real Estate Partners VIII L.P., a real estate private equity firm with $102 billion of assets under management, acquired 64 seniors housing properties for a purchase price of $1.125 billion. These 64 properties, which total 5,967 units, are currently owned by HCP, Inc. (NYSE: HCP) and operated by Brookdale Senior Living (NYSE: BKD) Occupancy is 85%.
On November 2nd, Cindat Capital Management Limited, a China-based investment management platform founded in 2013, and Union Life Insurance Co., Ltd., a life insurance company with over $13 billion in assets, entered into a joint venture agreement to purchase 39 senior care properties for $930 million. The portfolio includes 11 seniors housing communities master leased to Brookdale Senior Living and 28 skilled nursing/post-acute care facilities leased to Genesis Healthcare (NYSE: GEN). Welltower (NYSE: HCN) is selling a 75% ownership interest in the portfolio, while retaining a 25% interest. The transaction is expected to close by the end of 2016.