Public companies have made a statement so far in June, with a couple of REITs, one publicly traded operator and two foreign firms announcing acquisitions this week. First, across our border, Ontario-based Sienna Senior Living added one more Ontario retirement community to its portfolio. The 70-unit community in the town of Kingston sold for approximately $7.27 million, or $103,860 per unit. Then, across the Atlantic, Paris-based senior care operator Korian added about 1,000 beds, and eight long-term care/assisted living facilities, to its Belgium portfolio, which now numbers over 9,500 units. The Senior Assist group sold the facilities, five of which opened in the last 18 months.
Now to the domestic deals. The Ensign Group made the biggest splash this week, acquiring the real estate and operations of four senior care facilities in Utah (3) and Idaho (1) for an undisclosed price. Included in the portfolio is a 112-bed skilled nursing facility in Nampa, Idaho, a 99-bed SNF in Provo, Utah, a 115-bed SNF in Roy, UT, and an 83-bed assisted living community in Ogden, UT for those with intellectual disabilities. Overall occupancy is 82%, but Ensign is in the process of relocating the residents from the Provo facility to nearby facilities, including other Ensign-affiliated operations, and is evaluating its options for the soon-to-be vacant facility.
Another frequent acquirer of skilled nursing facilities, CareTrust REIT, added two more recently built SNFs in the southwest to its portfolio. Both operated by OnPointe Health and owned by a Texas developer, the larger facility (136 beds) is located in Albuquerque, New Mexico, while the smaller 126-bed facility is in Brownsville, Texas. In connection with the acquisition, CareTrust assumed the existing leases (with remaining terms of approximately 17 and 19 years) with affiliates of OnPointe. The investment is expected to generate an initial cash yield of 9.0% on the aggregate going-in annual cash rent of $2.5 million under the terms of the existing leases, which include both fixed- and CPI-based rent escalators. Both facilities are still in lease up, and still sold for $27.3 million, or an impressive $104,200 per bed, with a 12.8% cap rate based on estimated EBITDA. CareTrust funded the deal with cash on hand.
Finally, National Health Investors got a piece of the June action, acquiring a 60-unit assisted living community in Lansing, Michigan for $10.4 million, or $173,330 per unit, with an estimated 8.7% cap rate. The community is about 15 years old and will soon receive a $475,000 renovation by NHI’s operating partner, Bickford Senior Living. Bickford will operate the community (the 43rd community it leases from NHI) under a 14-year lease with renewal options and an initial lease rate of 7.25%, plus annual escalators. NHI funded the deal with a draw from its revolving credit facility.
