When a 234-unit CCRC in St. Charles, Missouri managed by Innovative Management Associates, a Chicago-based seniors housing owner/operator, was acquired for $17 million, or $72,650 per unit, the buyer enlisted the help of Bank Leumi to finance the transaction. Built in 1977, with expansions in 2011 and 2013, the community features 138 independent living units, 32 memory care units, 27 assisted living units (recently converted from IL) and 66 skilled nursing beds. Overall occupancy was around 76%, but that was brought down by the struggling IL component, which was just 51% occupied. So, the buyer will have their hands full with this community, but by increasing IL occupancy to 80%, annual revenues could jump by $1.0 million, with a significant portion of that going towards a higher annual EBITDA.
Bank Leumi provided a fixed rate, five-year $13.6 million loan (secured by a first mortgage on the CCRC) to facilitate the acquisition. In addition, the bank provided a $500,000 working capital line of credit (secured by the community’s accounts receivables) and a full suite of treasury management services. Mark Myers, Joshua Jandris, Charles Hilding and Richard Lynn of Marcus & Millichap represented the seller in the transaction.