Where Do M&A in Senior Housing Stand?

Where Do M&A in Senior Housing Stand?

Over the last several weeks we have discussed some of the top trends in senior housing in 2017 as well as the fact that renovating long-term living facilities should be viewed as an investment. If you recall, we talked about how skilled nursing facilities (SNFs) will begin to differentiate themselves from other senior living communities and they will also make adjustments based on resident needs. These are both important trends that we will be keeping a watch on as the year progresses.

Along those same lines, industry experts are predicting more mergers and acquisitions (M&A) in senior housing in the coming year. As many of you are probably aware, M&A are no stranger to the senior living industry. In 2014 alone, M&A in senior housing reached over $16 billion and continued throughout 2016. That being said, changes may be coming in this area. This is due to numerous factors, including:

  • Real Estate Investment Trusts (REITs) are becoming less acquisitive, which is opening the door for private equity, local, and smaller operators
  • M&A are often propelled by a strong economy, favorable demographics, and looking to the future
  • Senior housing costs may increase, providing opportunities for providers to work together in order to meet industry demands

It is also important to note that because seniors have so many options when it comes to senior living communities these days, many facilities are having a hard time attracting people. This is a perfect example of when an M&A may be the right move for all parties. If two or more facilities are experiencing low occupancy rates, can’t afford renovations, and are at risk of falling behind and losing residents, it may be time to consider an M&A. It is important that senior living providers are looking at all their options and making decisions that are best for the residents and facility operator alike. These days it is more important than ever for providers to pay close attention to how money is being spent and and listen to resident demands. Senior living residents are more inclined to choose a facility that offers the latest technological services, high-end care, and top-notch wellness services.
To learn more about M&A in senior living or to discuss investment opportunities, please do not hesitate to contact Shep Roylance of The JCH Group today.