Investors are setting their sights on an interesting industry: senior wellness, housing and healthcare. With businesses and organizations dotting major cities throughout the US, such as Dry Harbor Nursing Home in NYC, buyers are becoming more likely to place their funds in these institutions. According to a Norwalk company specializing in the field, the value of senior wellness M&As has increased by 600% since the last quarter due to two recent multibillion-dollar deals.
The move has brought the sector up to $9.7 billion, the highest it has been in three years. Steve Monroe, managing editor of TheSeniorCare Investor and of The Senior Care Acquisition Report says the increase “illustrates the continued investment interest in the sector and the willingness of buyers to commit significant amounts of capital despite current headwinds.”
“Each of the two largest transactions was more than double the dollar size of the largest acquisition in 2016, so it looks like the large deals are back in vogue,” he added.
Sabra Health Care REIT acquired Care Capital Properties in an almost $4 billion deal, and Hawthorn Retirement Group was acquired by Columbia Pacific Advisors for around $2.6 billion. Other major deals include the sale of Kindred Healthcare to BlueMountain Capital Management, LLC.
John Paulson has a solid history investing in the construction industry. Slow but steady increases in the market have pushed Paulson & Co. to support William Lyon Homes, a homebuilding company based in Newport Beach, CA. The company raised $217.5 million with its initial public offering earlier this month.
Despite hitting rough times in previous years, William Lyon’s sales jumped by over a third last year to $76.4 million. Last November, Paulson & Co. invested $30 million in the company. The firm now owns 21% of the stock as well as 10% of the voting power.
The recent investment indicates that Paulson may be shifting his focus back to the housing industry as the market improves. Prices of new homes are on the rise, and have increased by 11% since this time last year. According to the Financial Post, a Brooklyn townhouse on sale for $950,000 attracted over 300 visitors. While many investors and entrepreneurs are placing their bets with homebuilders, others are approaching the market from other angles.
Bill Smead of Smead Capital Management, for example, explained that he bought shares in Home Depot because it sells home construction equipment, and also invested in banks with inventories of foreclosed homes, like Bank of America, Wells Fargo and JP Morgan.
The worsening European crisis, negative reports on the U.S. economy and Congress’ budget cuts have resulted in dramatic market downturns over the past few weeks. Last Monday saw gold fall past $1,700, but as investors chose the metal as their safest bet it rebounded slightly. Silver also shifted in value, falling on Monday, November 21st and rising again on Tuesday. Reviews later showed that stocks have continued their losing streak, and the S&P posted a loss for the sixth day in a row.
David Kostin of Goldman Sachs explained that Congress’ failure to agree on budget cuts has left equity markets and the U.S. credit rating with deep concerns. “Failure to reach an agreement on at least the minimum required savings will reflect poorly on Congress and the S&P 500 could fall by 10% to 1,100%. The wide range of possible outcomes on both the super committee process and the unstable political economy in Europe drives our view that investors should assume the worst while hoping for the best.”
The U.S. Commerce Department reported that GDP grew less than expected- only 2% from July to September. Daniel Clifton, policy strategist with Strategas Research said “We would expect further downgrades, a first downgrade for Moody’s and Fitch and possibly a second downgrade from S&P.”