Senior living mergers and acquisitions faced challenges in 2023 due to market distress, wide bid-ask spread, and unclear road ahead. However, this is expected to change in 2024.
Owners of distressed properties are making tough decisions about what to sell and hold, while the prospect of interest rate cuts in 2024 is thawing M&A markets. Buyers and sellers are moving closer together in their expectations, leading to an increase in total dealmaking.
Latest M&A numbers show deal rebound
Despite a slow 2023, the pace of M&A picked up toward the end of the year. The industry saw a 22% increase in deals in the fourth quarter of 2023 compared to the third quarter, with a 32% increase from the same period in 2022. Anecdotal evidence also points to a rebound in deal activity, with higher transaction volume in January 2024 compared to the previous year.
Coming year a ‘realignment in perspective’
Many deals that didn’t happen in 2023 are expected to drive an increase in M&A in 2024. With distressed properties and incentives for making deals, the market is predicted to double the number of M&As from 2023. As banks position themselves for higher loan volume, and with demand for senior housing on the rise, companies are looking at bigger M&A transactions in the coming years.
