Ryan Saul of Senior Living Investment Brokerage closed out the month in style with two transactions. First, in Decatur, Illinois, Mr. Saul sold two senior living communities located across the street from each other. Built in 2001, Keystone Gardens is a 50-unit independent living community, while Keystone Meadows, which was built in 1999, features 60 units of assisted living. Both communities are 72% occupied. These were the only Illinois properties for the Michigan-based seller, which had reached their hold on the investment and decided to liquidate. The buyer, a Michigan-based regional operator with three other communities in Illinois and others across the Midwest, plans to leverage their economies of scale to improve margins (currently at 29% on $2.89 million of revenues), in addition to implementing a new marketing strategy to boost census. The purchase price came to $11.155 million, or $101,409 per unit, with a 7.5% cap rate.
Mr. Saul then worked with Toby Siefert and Matt Alley to sell an assisted living/memory care community in Kulpmont, Pennsylvania, which is about 60 miles north of Harrisburg. The buyer, a regional owner/operator with two other communities in the state, paid $3.8 million, or $84,444 per unit, for the property. The deal featured an above-average cap rate of 9.3%. Accounting for the low price was the low occupancy of 82% and the lackluster operating margin of 17% on approximately $2.06 million of revenues. If all goes according to plan, the buyer will focus on marketing to increase occupancy and increase rents to improve margins. The seller, The Hollinger Group, decided to exit the seniors housing business with the sale, and will instead focus on the rehab, LTACH and CCRC businesses.
