Why Senior Living M&A Is Booming Again | Bobby Guy

We're going to be talking about M&A.

We're going to talk about different capital markets, a bunch of different topics.

Bobby, bring us into the fold.

What is going on right now?

I'll tell you that what we've been seeing in the market is there's been massive M&A for the last year, 18 months or so.

And what we watched, call it 10 to 12 years ago, was a lot of the large players disaggregated, right? And so you would see, okay, we did the Golden Living spinoff, we did the Kindred spinoff, and it was all about those large national players spinning off to regionals and locals because they thought there was too much scrutiny at the national level.

Now you're actually seeing it reversed.

It's coming back around.

And so you're seeing lots of those companies beginning to aggregate back up.

You're seeing more people wanting to come potentially to the public markets.

And so it's really interesting to see that change come around.

And I would say that a lot of what drove it before was sort of the ability to handle the regulatory process and investigations and everything else.

Now I think there's more of a sense That, for example, at the large side of the market for taking down portfolios, you've got Insign and you've got Pax, and you don't have other public companies.

You have Brookdale, but Brookdale isn't really playing in the sniff space, for example, that much.

And so there are not many public companies in senior and in SNEF, and so what's happened is, especially in skilled nursing, you're watching, you need more public companies to take down big deals.

They're getting, Pax and Insign are getting their pick of all the deals, right, which is great, but there is capacity for people to grow their businesses and aggregate.

So, Bobby, one of my questions is, as you mentioned, it seems like this cycle started 18 months ago, maybe two years ago, whatever.

I'm just curious, how long do you think that's going to continue? It seems like everybody's been talking about, okay, it's the legacy product, it's undervalued assets, it's...

But at some point, you know, there's not been a whole lot of new assets being created for since 2020.

And it doesn't look like that's changing really soon as far as moving the needle on that.

So how much longer can this be the play of just acquisitions?

Yeah, I think that this probably plays really well for Lucas in doing a lot of renos, right? I think there's a lot of product out there that will continue to have to change hands because we have not done the building.

And if you look past the sniff market and you look at assisted and memory and independent, We've really built for the wealthier side of the market.

There is not much in the affordable.

And by affordable, I don't mean Section 8.