A private regional owner/operator purchased a skilled nursing/independent living facility in Paxton, Illinois with major plans to overhaul operations. The facility, built in 1962 with additions in 1975, 1988 and 1995, was owned by a faith-based not-for-profit and originally was built and cared for the local Illinois Knights Templars. However, over the years, the resident makeup has changed, as did the complexities of the skilled nursing reimbursement environment, knocking the facility’s original mission out of line with operating a profitable facility.
Adapting to the changes, the not-for-profit’s board hired Heritage Enterprises, an experienced skilled nursing operator, to manage the facility a few years ago. But, the facility was operating at a loss on under $3.3 million of revenues, with the 75 skilled nursing beds 61% occupied and the 15 independent living units 83% occupied. Combined, there was also a 52% private pay, 40% Medicaid and 4% Medicare census. So, the board decided to sell.
The buyer made sure to have some wiggle room in turning the facility around, paying $1.95 million, or $21,700 per bed/unit. In addition to owning and operating other SNFs in the region, which should help with scale, the buyer partnered with the operator of the other facility in town to combine operations at the two facilities. Ideally, the plan will boost operating efficiencies, improve occupancy and maximize reimbursement, while the buyer will also invest in new technology to help with staffing.
For older, rural SNFs, the road to success is certainly long, but reachable. Ryan Saul of Senior Living Investment Brokerage handled the transaction.
