Acquisitions

COVID-19 has changed many investors’ approaches to the seniors housing sector.  The pandemic caused a major shift in who’s buying and who’s selling. Some of the biggest buyers in 2019 were the biggest sellers in 2021. For example, institutional investors went from buying more than $2 billion in 2019 to selling more than $3 billion through the first three quarters of 2021. That’s according to Real Capital Analytics, a New York City-based data firm. The numbers are based on publicly announced deals over $2.5 million. “There still is an element of fear and uncertainty,” says Jim Costello, senior vice president with Real Capital Analytics. “We saw early in the pandemic that some of the management issues resulted in more fatalities. It’s not the problem now that it was then, but that comes with higher costs. More spending has to be done to mitigate the risks involved. That changes the investment opportunities.” These changes have led to a growing bid-ask spread in the marketplace. Buyers aren’t willing to spend as much, knowing that expenses are higher now, but sellers aren’t necessarily willing to reduce prices, says Costello. At least in 2020, this resulted in a massive dip in overall deal volume, …