When sales of skilled nursing facilities in New York occur, they can often come with a big price. That big price can be in total dollars invested as well as the price per bed. In a recent sale, it was both. Bon Secours New York Health System sold its Schervier Nursing Care Center in the Riverdale section of the Bronx for $87 million, or $239,000 per bed. The buyer was TL Management, LLC.
The 364-bed skilled nursing facility was built in the mid-1970s on nine acres and has approximately 250,000 square feet. Occupancy has been strong, averaging between 90% and 95%, and revenues in 2015 were $54.3 million. The 2016 Medicare cost report has not been filed yet. EBITDA in 2015 may have been close to $2.0 million, and while we have yet to determine what “normalized” EBITDA would be, we have to assume it would be between $10 and $12 million. That is high, but large New York City-area SNFs can sometimes be cash cows when properly managed. Gerry Adest of Loeb & Troper represented the seller in the transaction, one of the largest ever in New York.
