The dollar volume of publicly announced seniors housing and care acquisitions in the second quarter of 2017 surged to $9.7 billion, a nearly 600% increase over the first quarter’s volume of $1.4 billion.
The number of announced transactions in the second quarter (75) was basically even with the first quarter (76), according to new acquisition data from HealthCareMandA.com. The dollar volume is the highest since the second quarter of 2014.
Driving the dollar volume were two billion-dollar acquisitions, including the acquisition of Care Capital Properties by Sabra Health Care REIT in a transaction valued close to $4.0 billion, as well as the acquisition of Hawthorn Retirement Group by Columbia Pacific Advisors for an estimated $2.6 billion. In addition, there were three acquisitions each above $700 million in value. This includes the announced sale by Kindred Healthcare at the end of June of its skilled nursing division to private equity firm BlueMountain Capital Management, LLC.
This increase in dollars committed to the seniors housing and care sector illustrates the continued investment interest in the sector and the willingness of buyers to commit significant amounts of capital, despite current headwinds. Each of the two largest transactions was more than double the dollar size of the largest acquisition in 2016, so it looks like the large deals are back in vogue. While the dollars committed increased by 300% from last year’s second quarter, the number of transactions declined by 17%. Although there was word about some large deals brewing, the dollar volume was higher than we had expected, while the deal flow was known to have slowed a bit.