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The rapid M&As and reshuffling of long-term care and skilled nursing facilities continues into 2022
Factors Affecting the Long-Term Care Market and CHOWs for Q1 2022
Long-term care is an incredibly competitive industry and COVID-19’s impact on facilities has only compounded tight margins. Home-based care is becoming increasingly attractive to many, but that hasn’t hampered the rapid pace of change of ownerships (CHOWs) coming out of a bullish 2021.
Low interest rates are compelling buyers to secure loans, funding expansions into new regions or retooling existing facilities, before forecasted rate hikes come into effect. In the short term, however, expect hot M&A activity as smaller operators continue to transfer facilities to better-positioned chains while rates are reasonable.
Expected inflation is on the minds of many. A recent McKnight’s survey reported 52% of CEOs were worried about inflation. Only time will tell whether higher interest rates will bring the bear to long-term care M&As and slow the rate of change of ownerships.
Despite all this activity, there are ongoing issues in skilled nursing at large. For some, staffing costs are eclipsing revenue per patient day averages and the end to the staffing shortage isn’t yet in sight.
Notable Long-Term Care Facility Change of Ownerships Kickstarting 2022
Eduro Healthcare has acquired 9 buildings across Texas in the last 12 months. Their latest change of ownership, a 100-bed facility in Grapevine, Texas, was completed in less than 60 days. Landlords are reported to be pleased with their new Utah-based operator and expect ongoing growth.
Evans Senior Investments sold 8 Ohio communities for $70M to a regional operator with an existing presence in the area. Their portfolio consists of 799 beds and recently received a large Medicaid rate increase that adds $2.5M in revenue to their communities.
Senior Living Investment Brokerage sold 2 skilled nursing communities in Pennsylvania to a NY-based investor. SLIB deemed its 80-bed facility a non-core asset, so it included a 180-bed facility to make the offer more attractive to its new owner. The buyer is reported to be aggressively growing their portfolio.
Cushman & Wakefield assisted in the sale of a 135-bed skilled nursing facility and an assisted living facility in Chestnut Hill, Massachusetts. The change of ownership is a joint venture between Harrison Street and LCB Senior Living, LLC, which plans to renovate one facility and convert the other into additional assisted living space on an existing campus.
A 70-bed skilled nursing facility in central Illinois sold for $5M. CIBC Bank USA secured the acquisition loan for a buyer looking to improve the facility’s occupancy and cut its expenses.
In Florida, an owner-operator arranged the sale of 2 SNFs for $51M with Blueprint Healthcare Real Estate Advisors to an undisclosed buyer.
Family-owned Limestone Health Facility sold its 170-bed skilled nursing facility to Preston Health Services Inc. PHS already owns 3 SNFs in northern Alabama, with this acquisition bringing their total bed count to 564 licensed beds.
The Pennant Group is transferring five of its senior living facilities in Arizona, California, and Washington to The Ensign Group. All the facilities in this change of ownership are located near Ensign-affiliated skilled nursing facilities. Pennant reported a challenging Q3 in 2021, compounded by labor expenses, supply challenges, and insurance costs.
For LTC Change of Ownerships, Choosing the Right Partner Pays
LTC Ally has been assisting owner-operators with change of ownerships in long-term care and skilled nursing for almost two decades. Our in-house experts can secure payer contracts, expedite licensure, and complete provider enrollments in record time for any acquired facility. LTC Ally’s assistance during the CHOW process includes due diligence, billing and collections auditing, contract negotiations, and leveraging established relationships we have with state and federal agencies.
Since 2006, LTC Ally has been providing growth advisory services for long-term care operators. Our financial and healthcare experts are standing by to accurately vet prospective facilities’ licenses, census, and revenue before you commit.
It’s essential you have accurate valuations when considering bringing a new facility into your portfolio. With our full suite of financial management services, we can see a facility’s true potential and provide robust solutions tailored to improving its functions, securing your investment’s potential to be profitable.
Contact us today and learn how we have brought new facilities up to full operation before their first billing cycle.
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