Two Assisted Living Sales Close in Florida

Brad Clousing of Senior Living Investment Brokerage is starting strong this year, selling three assisted living communities in two transactions for a combined $23 million. Partnering with Patrick Burke, Mr. Clousing first sold a 37-unit assisted living community in Martinsville, Virginia, a transaction that was a long time coming. In July 2015, the same selling partners sold the adjacent 300-bed skilled nursing facility for $28.5 million, or $95,000 per bed, in a sale/leaseback transaction to Omega Healthcare Investors. The long-term lease came with an initial yield of 9.25%.

Awaiting TPA approval, the assisted living community eventually sold to Omega as well at a price of $7.5 million, or $202,703 per unit, with an 8% cap rate. Built in 2000, it brought in nearly $600,000 in EBITDA on approximately $1.63 million of revenues and was historically well occupied (97% at the time of the sale). But as with the skilled nursing facility, the partnership group had members wanting to exit the industry and a few partners willing to remain operating the campus under the lease agreement.

Then Mr. Clousing, with Jeff Binder, sold two properties in Florida that have each traded twice already since 2010. At a price of $15.5 million, or $101,974 per unit, the new owner, a partnership between a Florida-based operator and a private investment group, purchased the assisted living/memory care communities from Newcastle Investment Corp.

The communities have already had quite the transaction history. According to our records, the 73-unit Hollywood community, which was built in 1999, sold to TJM Properties in 2010 for $7.85 million, or $107,534 per unit, while the 79-unit community in Pembroke Park was purchased by TJM in 2012 for $4.3 million, or $54,430 per unit. TJM then turned around and sold the communities as part of a 15-property, $200 million deal in 2013 to Newcastle Investment Corp (now New Senior Investment Group). Holiday Retirement operated them, but considered them outliers, prompting the sale. The two properties, which brought in nearly $1 million in EBITDA on $7 million of revenues, are in good physical condition and are geographically well clustered. Occupancy was around 85%, which could be improved.

 

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