Healthcare M&A Market Beats the Odds, Remains Resilient

The senior living industry has shown just how resilient it is over the last several years. Among the hardest-hit industries, healthcare operators have faced unprecedented challenges and risen to the occasion. Despite battling labor shortages, a recession, and changing housing models, the healthcare M&A market reported a sales increase in Q3. According to numbers released last month, Q3 saw almost 2,300 senior care deals, a huge increase from the same time last year. If activity continues at this impressive pace, experts predict 2022 will be a record-breaking year. 
However, higher interest rates have affected some seniors housing and care deals, with reports of transactions falling through at the last minute due to “higher capital costs and inflation.” Sherman & Roylance, for one, had an impressive Q3 with numerous deals closing, including a 44-bed assisted living facility in South Carolina. Our Southeast market representative, Jack Osteen, played an instrumental role in closing the deal and throughout the entire escrow process and had this to say:
 “The Southeast, specifically South Carolina, continues to be one of the strongest markets for senior housing in the entire country. A new study shows South Carolina ranked #3 in the nation last year as a destination for a percentage of people moving versus those leaving the state.”

What Challenges Will Impact the Market? 

As we settle into Q4, all eyes will be on the challenges facing the healthcare industry. M&A activity slowed in 2020 as federal funding provided many facilities with a life vest. However, pandemic assistance is no longer an option, leaving many companies under financial pressure to reinvent the wheel. This is just one of the factors contributing to the M&A market and something we expect to play a role moving forward. 
Sherman & Roylance co-founder John Sherman explains that "the number one challenge in 2022 and years to come will be getting and retaining staff.” 
The last several years have been a seller’s market thanks to high demand and low inventory, but the market is now in favor of buyers. The Sherman & Roylance team has extensive experience representing individuals and groups of the sale or acquisition of a wide range of senior housing facilities. As demand continues and Baby Boomers consider their options, it’s important you understand the value of your asset and make decisions accordingly. We offer free business valuations and can help you develop an exit strategy or consider your other options. 
While the healthcare M&A market has experienced ups and downs, the market remains resilient and prepared for the road ahead. As always, the S&R team is keeping a close eye on the latest trends and developments impacting senior living and will happily answer any questions.