Healthcare Real Estate Capital Acquired by Advisory Firm

Kaufman, Hall & Associates, a healthcare and higher education management consulting and advisory services firm, has acquired Healthcare Real Estate Capital, a national advisory firm focused on the healthcare and higher education real estate capital markets sectors.

The transaction is another indication that healthcare real estate is receiving a great deal of interest from investors.

Last week, GlobeSt reported that seniors housing and skilled nursing facilities were moving into favor.

A mix of near-term challenges with long-term potential could make the seniors housing and skilled nursing sectors investor favorites, a new report from Marcus & Millichap predicts.

Third quarter data showed that seniors housing move-ins are rising as more residents become vaccinated, with occupancy rising in both segments from July through September. Rents are also up annually by more than 1% across all four levels of care, led by memory care and assisted living.

Skilled nursing’s recovery was a bit more muted, with occupancy at 76.2% in November, down 1,000 basis points over 2019 numbers. But nationally, the average daily rate has increased or held firm in every quarter for more than a decade.

Private Equity Showing Keen Interest in Health Care RE

A month prior, a report from Irving Levin Associates pointed to greater interest in the specialty pharmacy, medical office buildings and behavioral health segments, GlobeSt reported.

Notable demand growth in specialty pharmacy providers, increased activity in the healthcare real estate market for medical office buildings and upbeat, stable activity in the home health and hospice and behavioral health care sectors powered M&A volume in Q3 2021, according to Irving Levin Associates.

More and more patients are seeking alternatives to facility-based care, turning toward home health services, and anxiety caused by the effects of the COVID-19 pandemic is causing a surge in individuals seeking mental health treatment and services.

“The healthcare M&A market is booming right now, largely driven by private equity activity across a variety of sectors,” said Dylan Sammut, editor of Health Care at Irving Levin Associates. “We’re seeing the usual interest for physician groups and behavioral health providers, but investors should keep an eye out for deals involving emerging companies, such as specialty pharmacies and chronic care management platforms. Dealmakers tell us that’s the next big wave.”

Wesley Champion, managing director and chief executive officer of Kaufman Hall, noted that institutions in both sectors are currently experiencing a historic transformation impacting where and how they deliver services. 

“Real estate is a very significant and valuable asset for healthcare and higher education institutions,” Champion said.