Strawberry Fields REIT entered the state of Arkansas in a big way, acquiring nine skilled nursing facilities in the state from one seller, plus one Kentucky facility from another. Totaling 1,004 beds, the facilities were owned by The Skyline Group, which acquired them from AdCare Health Systems, Inc. in October 2016 for $55 million, or 54,780 per bed, after leasing them for several months at a rate of $450,000 per month. The facilities are currently profitable, but report occupancy in the low-70s, with a 15-20% quality mix, and they are now being sold for $37.975 million, or $37,800 per bed. Strawberry Fields REIT will brand these facilities under the “Waters” brand and will add them to a master lease with entities consulted by Infinity of Arkansas. The operators will also invest $2 million in the next two years in building improvements.
In the second transaction, Strawberry Fields REIT acquired a 120-bed skilled nursing facility in Louisville, Kentucky for $4.45 million, or $37,100 per bed. Considered a turnaround, but with 90% occupancy and a 15-20% quality mix, the facility was purchased from a not-for-profit. It will be added to an existing master lease with the Landmark Group. Both transactions were financed in part with the issuance of $33 million in secured corporate debt.
