Big bucks back for SNFs

After a month during which we saw no publicly announced skilled nursing acquisition valued higher than $63,000 per bed (well below the average price of $79,900 per bed in the 12 months ending September 30, 2015), here comes two announced in quick succession early this month valued over $100,000 per bed. First, California-based REIT, LTC Properties, acquired a 126-bed facility in the Fort Worth-Dallas area for $16 million, or $126,984 per bed. What attributed to the high price? The facility was brand new, opening in mid-2015. LTC added the property to an existing master lease with an affiliate of Fundamental Administrative Services LLC at an incremental initial cash yield of 8.5% and annual rent escalators at 2.5%. And then second, Salt Lake City-based Avalon Health Care purchased a 288-bed facility in Honolulu, Hawaii for $44.6 million, or $154,861 per bed. The deal marked a profitable exit for the seller, a family trust, which bought this facility in 2005 for $31.5 million. Avalon has been operating the facility for over a decade and will continue to do so.