In a sign that commercial real estate values are driving big nursing home buyouts, the Carlyle Group has agreed to purchase Manor Care Inc. for $6.3 billion. It's the industry's second largest deal to date, exceeded only by the first-quarter $6.8 billion purchase of Holiday Retirement by Fortress Investment.

"The Manor Care deal is very positive for the nursing home sector," says Michael Wiederhorn, health care analyst at CIBC World Markets in New York City. "Investors are showing strong interest."

Based in Toledo, Ohio, Manor Care (NYSE:HCR) owns about 500 nursing homes, hospice and home-care agencies, assisted living facilities and rehab centers. The company operates in 30 states, but most of its buildings are in Illinois, Florida, Michigan, Ohio and Pennsylvania.

Manor Care owns, rather than leases, most of its properties, which tend to be newer, well located and with little mortgage debt. That made the company an attractive target, analysts say. Also, Manor Care gets much of its revenue from high-paying Medicare and private-pay residents.

Carlyle will pay $67 a share for Manor Care (NYSE:HCR). The stock closed July 23 at $63.93. The deal is expected to close by year's end.

Analysts agree prices could be topping out. "No one will get a higher price than Manor Care," says Wiederhorn. "Its assets are premium quality. Going forward, industry consolidation will continue, but on a smaller scale. There aren't a lot of big deals left."