After a pause in seniors housing acquisitions in 2020 as a result of the COVID-19 pandemic, it appears volume is back to normal, according to experts within the industry.
“Before the pandemic started, volume was pretty good for acquisitiions and there was an ample pool of buyers out there,” said JP LoMonaco of Valuation & Information Group. “Debt and equity were available from among the widest variety of sources I’ve seen in a long time. Then we had the pandemic and everything came to a screeching halt.”
LoMonaco’s comments came during a webinar titled “Seniors Housing Valuation: What’s Ahead for 2022?” that he moderated. Other panelists included Talya Nevo-Hacohen, Sabra Health Care REIT; Michelle Kelly, National Health Investors; Michael Stoller, LCB Senior Living; and Ryan Maconachy, Newmark.
“We’re back to pre-COVID transaction levels on a volume basis,” said Maconachy. “We expect that 2021 will end up being in line with where we were in 2019 and a little bit higher than where we were in 2020 — 2022 is setting up to be a very busy transactional year.”
Maconachy added that more of the transactions in 2021 were single-asset deals and fewer portfolios, noting that sales volume for Newmark was up 10 percent year over year, but the number of total deals were up 100 percent.
Data from Real Capital Analytics confirms this — through November, transaction volume in 2021 was comparable to 2019 after a downturn in 2020.
Nevo-Hacohen said that Sabra has seen a “huge surge” in deals being marketed, primarily in private-pay seniors housing.
“We’ve seen plenty of situations where sellers are looking for liquidity — they have assets that are performing well, but they need liquidity for other situations,” said Nevo-Hacohen. “That’s been an interesting opportunity for us. We’re seeing more portfolio sales in the last six months, where we saw more single-asset deals earlier in the year and in 2020.”
For NHI’s part, Kelly said the REIT had a down year in transaction volume, but that still resulted in $130 million in acquisitions.
“In 2022, I would expect us to be back, aggressively searching for new investment opportunities,” she said.
Transaction volume has been bolstered by buyers and sellers who have similar expectations on price, noted Stoller.
“In the institutional world there is much more balance,” he said. “In the mom-and-pop business, the one-off, two-off ownership properties, there is still a huge disconnect between what they expect and what the market is willing to pay.”
To view the full webinar, click here.
— Jeff Shaw
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