Continuing the Sunwest saga, Omega Communities purchased a 104-unit assisted living community in Hoover, Alabama that was a Sunwest property from 2006 to 2010. When the company filed for bankruptcy protection, the lender foreclosed and then sold it to an individual investor, who issued bonds to finance the acquisition. AdCare Health Systems guaranteed the bonds, and $6.1 million were still outstanding. Recently, the community hit another speed bump, when in 2014, the state required the owner to hire a new management company, which discharged more than 30 residents. Average rents were about $2,400, but occupancy was below 50%, resulting in negative cash flow. Assuming 85% occupancy, pro forma revenues and EBITDA can reach $2.6 million and $700,000, respectively. It will take some hard work from Omega to turn around the community, for which it paid $6.9 million, or $66,300 per unit. Mike Pardoll of Marcus & Millichap represented the seller in the transaction.
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