Higher Interest Rates Show No Sign of Slowing, Recovering Facilities Find New Owners
The pace of change of ownerships continued at a rapid pace in the long-term care industry during Q2, despite numerous factors creating uncertainty and sizable fluctuations in critical markets. The Federal Reserve’s June rate hike of 75 bps has come into effect with more increases in market interest rates expected to address ongoing inflation.
CBRE forecasts 2022 investment volume to increase 5-10% over 2021, bringing activity back to pre-pandemic levels. How much of this volume will be seen in long-term care is yet to be known, but the reshuffling of facilities to better positioned regional operators is an ongoing trend.
On average, bed prices have remained stable compared to 2021, according to a report by Evans Senior Investments. Data from the NIC MAP Data Service shows occupancy rates rising steadily, reaching 77% by March.
Let’s take a look at some notable actions and acquisitions from this quarter.
Notable LTC Change of Ownerships in Q2
Welltower Inc. further limited its exposure during Q2 in the long-term care market, closing the sale of two more properties for $17 million. This continues the REIT’s planned exit from Genesis HealthCare properties with sales being used to repay debt obligations back to Welltower. Over the last year, the REIT has sold over $525 million in the space.
Genesis’ troubled facilities have not dampened interest in the industry at large from other investors. One of Oklahoma’s largest SNF operators took ownership of three SNFs in Tulsa and Cushing, a deal totaling 243 beds. The seller was a local operator who for several years was reported to be looking to exit the industry. The consolidation of facilities to larger, regional operators follows a similar trend seen in many other regions.
Another Midwest-based operator took ownership of facilities in Pennsylvania and Delaware, purchasing the 12 properties from a private equity group for $140.5 million. This LTC change of ownership followed the White House’s comments on private equity’s involvement in long-term care. New owners report the performance of the facilities has been positive and they expect to increase census by leveraging their knowledge of the post-acute care market.
Hill Valley Healthcare expanded its footprint in Virginia by acquiring a continuing care retirement community in Farmville. The community includes 120 skilled nursing beds and 85 assisted living beds, serving seniors across the care continuum, and is their 10th community in the state.
New Jersey-based Tryko Partners expanded its portfolio in the state, taking ownership of two skilled nursing facilities in Berlin and Mount Holly with 180 beds and 128 beds, respectively. Virtua chose Tryko Partners as suitable partners for the LTC change of ownership to continue their plans of supporting “an optimal continuum for patients.” Trykos’ director of acquisitions reported the facilities were identified for their exceptional reputations and dedicated staff.
Trustwell Living acquired three communities in the Great Kansas City area, following its acquisition of another facility in Springfield, IL. The operator, which first launched in 2021, will hire all employees in each community and offer benefits focused on retention and expanding its staff. They plan to inject capital into the communities to complete renovations and improvements to the communities.
In the world of upscale communities, Carlsbad, California-based Kisco Senior Living acquired a luxury property in Laguna Niguel. The acquisition is reported to be part of the operator’s step into luxury offerings and will be branded as a Kisco Signature Community. The operator is set to open another luxury community in Gaithersburg, MD, by 2024.
LTC Ally is Home to Experts in LTC CHOWs
For growing operators looking to credential facilities or get access to managed care contracting experts, LTC Ally has seasoned specialists for all provider types. We have helped change of ownerships in multiple states take place in record time, assisting with every step in the process, from credentialing to finalizing enrollments with payer sources.
Once your facility is set up and receiving revenue, we provide ongoing assistance, maintaining all licensing and credentialing needs. With our experts as your partner, there is no other CHOW experience more effortless in long-term care.
Contact us today to get access to a team of specialists that can help your long-term care facilities be the most competitive and compliant in your market.
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