Jim Kornick and Dan Baker of Avison Young led a successful bidding process for a 130-bed skilled nursing facility in Alexandria, Virginia, generating 12 offers and closing at $13 million, or $1 million over the original asking price. Only operating with 100 beds, the facility was owned and operated by a local family who had originally developed it 40 years ago. Located next to a major hospital, it had a history of good operations and had a high quality mix, with 47% Medicare, 25% private pay and 28% Medicaid on 80% occupancy. However, expenses recently ran high, and the facility was losing money as of closing.
The buyer, a publicly traded REIT, will look to immediately improve the operating margin, leasing the facility to a large regional operator with which it has an existing relationship. Well done to the Avison Young team, which sold the cash flow-negative facility for an above-average $100,000 per bed, based on licensed beds.
