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Despite challenges with lending and interest rates, the year 2024 is showing promise for new senior living transactions. Brokers are reporting an increase in transaction volume, with over 250 deals tracked so far, many of which are on the smaller side.
Senior Living Investment Brokerage (SLIB) is anticipating a record-breaking year, with more transactions expected to close compared to 2023. However, stubborn interest rates remain a barrier to new deals.
Marked transaction improvement
Overall, brokers are observing an active year for new senior living M&A, and the year 2024 is progressing as expected. While interest rate cuts have not materialized, transaction volumes are up, with deals expected to surpass the previous year.
There are positive factors contributing to the increased momentum in deals this year, such as high-quality assets hitting the market and funds needing to deploy capital. The lending environment has become more flexible, and there is hope for interest rate cuts in the near future.
‘Volume is going to continue to increase’
Although there has been a notable uptick in deal activity, the dollar volume of transactions may be impacted by distress in the healthcare sector. But brokers remain optimistic about increasing transaction volumes as the year progresses.
Looking ahead, there is a sense of optimism in the senior living M&A space, with the potential for a wave of transactions if the Fed cuts rates. Challenges persist due to the current capital market conditions, but there is anticipation for a flurry of deals once key catalysts come into play.
