Nick Cacciabando of Senior Living Investment Brokerage had a busy end to October, representing the seller in three Kansas SNF sales to Birchwood Health Care Properties, which included a couple of turnaround opportunities. First, together with Ryan Saul, Mr. Cacciabando represented a private owner/operator in the sale of their 96-bed skilled nursing facility in Wichita, Kansas for $1.25 million, or $13,000 per bed. Although located in a major MSA in Kansas, this will be a difficult turnaround for the buyer. Built in 1968, the facility was just 67% occupied with a 92% Medicaid census, 6% Medicare and 2% private pay. Plus, it was losing more than $600,000 a year on $3.2 million of revenues. So Birchwood will hire New Paradigm Solutions, based in Manhattan, Kansas, to take over management (and at the other two facilities it acquired) and plans to invest capital in the physical plant to improve on occupancy and quality mix.
Next, Mr. Cacciabando teamed with Jeff Binder to facilitate the sale of a 59-bed SNF, with 14 residential care beds, in Herington, Kansas for $2.1 million, or $35,600 per bed, with a 12.85% cap rate. Originally built in 1965, with expansions in 1974 and 1998, the facility was decertified from 58 skilled beds to 45 beds a few years ago. With no competitor within 25 miles of its location, the facility was 78% occupied in the SNF and 93% in the RCF. The owner, a large regional operator based in Kansas, decided to sell the facility as it was a portfolio outlier.
The same duo from Senior Living Investment Brokerage sold a well occupied 45-bed SNF in the town of Salina for a purchase price of $2.2 million, or $48,900 per bed, with a 10.86% cap rate. This is the most stabilized facility purchased by Birchwood this month, with an occupancy of 98%, but the price per unit is still below average. It was built in 1965 and 1980 adjacent to an independent living community owned by the seller, which will be leased to the buyer with a purchase option in three years.