April 21, 2015

From Senior Housing News

by Tim Mullaney

Mid-sized senior living providers that are looking to grow have opted to build rather than buy lately, in part because they’ve been priced out of the acquisition market. But these operators soon could be seeing more opportunities to expand their footprints by purchasing — if they’re willing and able to navigate the more complex types of deals around distressed properties.

Financial distress is increasing in the health care sector — including senior housing — even as bankruptcies have fallen sharply across U.S. industries as a whole, attorney Bobby Guy, a shareholder in the health care practice at Kansas City, Missouri-based firm Polsinelli, tells SHN.

While acquiring these properties has historically been the province of a relatively small “distress community,” they present a “significant strategic opportunity” that should not be overlooked by the development departments of senior living operators, including smaller players, Guy says.

Health care reform and market forces make it likely that financial distress will continue to increase in the seniors housing space, so providers looking to grow through acquisitions could see a more inviting playing field, experts tell SHN. The takeaway? Now is the time to develop the right skills for this game.


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