Sometimes size really does matter for the owner of a senior care facility, especially in this era of red tape gone rampant. We know that with every regulation, there is an added cost coupled with the intended benefit. But it reaches a point where those single- or two-facility owners in senior care cannot keep up and provide the same quality care at a profit. That was the stimulus for a single-asset owner’s exit from the senior care business, which was handled by Toby Siefert and Nick Cacciabando of Senior Living Investment Brokerage.
The owner originally built the property as a 50-bed skilled nursing facility in Portage, Pennsylvania (about 80 miles east of Pittsburgh) in 2003, adding a 22-bed personal care unit in 2007. It is mostly comprised of semiprivate rooms, and occupancy typically hovered around 80%. Rents were low for the all-private pay personal care component, ranging from $1,775 to $2,000 per month. Although the skilled nursing portion had a decent 30% quality mix, the property operated at just a 6% margin on $4.04 million of revenues.
Improving that will be the job of the new owner, a regional operator based out of New York with a strong skilled nursing presence in Pennsylvania, which paid $5.2 million, or $72,222 per bed. Their larger size should help with operational efficiencies and the current (and future) regulatory environment. We’re not holding our breath for any relief from the “Trump effect.”
