Recent operational difficulties certainly affected the value of a recently sold skilled nursing facility in Aurora, Colorado, but it is certainly on the upswing. Built in 1973, this 120-bed facility was traded back and forth in the 1990s (selling for $4.85 million in 1995 and for $6.62 million in 1998) and eventually became part of a California-based publicly traded REIT’s portfolio. It recently ran into some operational difficulties (including a stint on the special facility focus list), prompting the REIT to hire a new operator and get the facility back on track towards regulatory compliance and improved operations.
The operator had succeeded in turning around the property, but the REIT soon deemed the facility to be non-core and decided to sell. There is, however, a lot of work still to be done, as occupancy currently stands at 56% (with a high Medicaid census), and annual revenues come to nearly $5.6 million.
The purchase price, at $5.4 million, or $45,000 per bed, is lower than its price from nearly 20 years ago, reflecting that long path to success. A New York-based healthcare real estate investor emerged as the buyer and will lease the facility to a prominent regional operator with an existing footprint in Colorado. Helping the facility’s turn-around should be its close proximity to University of Colorado Hospital and CU Anschutz Medical Campus, but time will tell. Chris Hyldahl and Gideon Orion of Blueprint Healthcare Real Estate Advisors handled the transaction.
