A tenant bankruptcy brought in a new operator and ultimately a new owner at a 198-bed skilled nursing facility in Alabaster, Alabama.
Originally built in 1972, this SNF was historically above 90% occupancy with cash flow exceeding $1.5 million. However, licensure issues led to a drop in both census and operating margin (and combined with other reasons, bankruptcy) for the previous tenant, a regional operator. The owners of the real estate, two private families, were also in bankruptcy but had court-approval to sell the asset.
When the tenant decided to vacate the property, the eventual buyer, a private investor from New York, stepped in to operate for six months before closing on the sale in October, paying $9.2 million, or $46,500 per bed.
There are some clear skies ahead for the new owner/operator, as the Medicaid rate will jump nearly 5%, a significant increase for a majority of the SNF’s census. That should help. Mike Pardoll of Marcus & Millichap handled the transaction.
