{"id":4105,"date":"2023-12-05T23:53:15","date_gmt":"2023-12-05T23:53:15","guid":{"rendered":"https:\/\/ltcally.com\/articles\/?p=4105"},"modified":"2023-12-05T23:57:25","modified_gmt":"2023-12-05T23:57:25","slug":"q3-2023-snf-chows","status":"publish","type":"post","link":"https:\/\/ltcally.com\/articles\/q3-2023-snf-chows\/","title":{"rendered":"Making Waves in LTC: Q3 CHOWs and Acquisitions"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"SNF_Market_Slows_Substantially_M_As_Broadly_Lower\"><\/span>SNF Market Slows Substantially, M&amp;As Broadly Lower<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Last quarter saw the lowest amount of activity for skilled nursing mergers and acquisitions in the last ten years. Only 115 transactions took place in senior housing more broadly, with just 41% of those being skilled nursing deals. The figures according to data from LevinPro show a chasm between quarters:<\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/ltcally.com\/articles\/q3-2023-snf-chows\/#SNF_Market_Slows_Substantially_M_As_Broadly_Lower\" >SNF Market Slows Substantially, M&amp;As Broadly Lower<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/ltcally.com\/articles\/q3-2023-snf-chows\/#Senior_Housing_Debt_Maturing_in_2024\" >Senior Housing Debt Maturing in 2024<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/ltcally.com\/articles\/q3-2023-snf-chows\/#Skilled_Nursing_Change_of_Ownerships_of_Note\" >Skilled Nursing Change of Ownerships of Note<\/a><\/li><\/ul><\/nav><\/div>\n\n\n\n\n<figure class=\"wp-block-pullquote\"><blockquote><p>In 2023, Q2 saw deal volumes of $1.29B compared to just $700M in Q3. In 2022, transactions in Q3 amounted to $3.87B. That is a staggering drop that mirrors <a href=\"https:\/\/www.pwc.com\/gx\/en\/services\/deals\/trends.html\">declining M&amp;A activity<\/a> since a 2021 peak in other markets.<\/p><\/blockquote><\/figure>\n\n\n\n<p>According to an <a href=\"https:\/\/www.ahcancal.org\/News-and-Communications\/Fact-Sheets\/FactSheets\/Access%20to%20Care%20Report%20August%202023.pdf\">AHCA report<\/a>, only three new facilities will be constructed in 2023. On average since 2020, approximately 60 new constructions have been certified each year. Alongside the declining national bed count, these figures support how tepid the SNF market has become.<\/p>\n\n\n\n<p>Among the many factors at play, the collapse of Silicon Valley Bank has had a significant impact on lending. The Federal Reserve\u2019s review of what caused the bank\u2019s collapse has resulted in many lenders becoming far stricter. Regional banks, for example, have been increasingly more conservative when <a href=\"https:\/\/www.levinassociates.com\/the-changing-healthcare-real-estate-market\/\">lending for commercial real estate<\/a>.&nbsp;<\/p>\n\n\n\n<p>Despite a massive post-mortem of the <a href=\"https:\/\/www.conference-board.org\/publications\/Silicon-Valley-Bank-SVB-Collapse-Implications-for-Business\">2023 banking crisis<\/a>, markets and actors are still waiting to see what will happen with Fed rates in 2024 and living with the reality of high interest rates.&nbsp;<br>There is some consensus that <a href=\"https:\/\/www.cfo.com\/news\/will-the-fed-start-lowering-interest-rates-in-2024-inflation\/694192\/\">rate cuts are likely to occur in 2024<\/a>, but more conservative observers are betting on 2025 being the year of lower rates and more stimulus.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Senior_Housing_Debt_Maturing_in_2024\"><\/span>Senior Housing Debt Maturing in 2024<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>$500B in senior housing debt will be <a href=\"https:\/\/www.levinassociates.com\/the-changing-healthcare-real-estate-market\/\">maturing in 2024<\/a>. This could spell trouble for some smaller operators who have relied on sizable lines of credit to help them through the last several years.&nbsp;<\/p>\n\n\n\n<p>Large REITs like LTC Properties are reportedly in a <a href=\"https:\/\/skillednursingnews.com\/2023\/10\/ltc-properties-execs-bank-caution-on-snfs-drives-opportunity-operators-poised-for-margin-improvement\/\">holding pattern<\/a> and watching operators with loans coming due that can\u2019t refinance or make their payments. This could continue the consolidation of facilities to ownership under strong regional and large operators.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Skilled_Nursing_Change_of_Ownerships_of_Note\"><\/span>Skilled Nursing Change of Ownerships of Note<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Welltower Inc. acquired <a href=\"https:\/\/skillednursingnews.com\/2023\/10\/welltower-makes-405m-snf-investments-in-q3-for-24-properties-at-140-per-bed\/\">24 long-term and post-acute care properties<\/a> worth more than $400M. It has not announced who would operate the facilities.&nbsp;<\/p>\n\n\n\n<p>OPCO Skilled Management took ownership of Sombrillo Skilled Nursing Facility and Aspen Ridge Assisted Living Facility, previously <a href=\"https:\/\/ladailypost.com\/los-alamos-retirement-community-announces-sale-of-sombrillo-and-aspen-ridge-to-opco-skilled-mangement\/\">operating as community non-profits<\/a> under Los Alamos Retirement Community. The seller reported labor shortages and \u201cthe general liability situation in New Mexico\u201d as reasons to transfer the facilities to a larger owner more able to spread its risk.<\/p>\n\n\n\n<p>CareTrust REIT entered into a joint venture with a regional operator to acquire La Fuente Post Acute, bringing $25.5M to the deal. The 187-bed facility in Vista, California will be operated by Bayshire Senior Communities, who have existing relationships with CareTrust.<\/p>\n\n\n\n<p><a href=\"https:\/\/ltcally.com\/services\/long-term-care-chow\">Explore Our Change of Ownership Services<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Read our Q3 2023 newsletter on skilled nursing mergers and acquisitions for key insights from industry professionals | LTC Ally<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[21],"tags":[],"class_list":["post-4105","post","type-post","status-publish","format-standard","hentry","category-newsletters"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Making Waves in LTC: Q3 CHOWs and Acquisitions | Articles | LTC 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