HFF showed its strength in the skilled nursing M&A market, closing three transactions at the end of last month. Dave Fasano sold four Florida SNFs currently in receivership to New York-based TL Management for $24 million, or $66,850 per bed. Built between 1965 and 1996, the facilities averaged 87% occupancy but operated at just a 5.7% margin on about $26 million of combined revenues. However, TL Management believes EBITDA could be increased to $3.5 million, which if true would yield a very conservative cap rate of 14.6% on the purchase price. TL, with its over-100 SNF portfolio across 10 states, will have to use all of its experience to get the job done.
Mr. Fasano then teamed up with Ross Sanders to sell a skilled nursing campus in Claremore, Oklahoma. The 189-bed campus averaged 82% occupancy, but performance varied significantly across the property, as one building operated at a 5% margin on about $9 million of revenues, while the other building had negative EBITDA on $3.2 million of revenues. In the end, both sold for a combined $11 million, or $58,200 per bed, to an undisclosed buyer.
Fasano and Ross teamed up again to sell a pair of skilled nursing facilities in Missouri with 270 beds. The purchase price was approximately $7 million, or just under $26,000 per bed. One of the facilities, with 120 beds, was built in 1976 in St. Joseph and was 65% occupied and was losing money. The second facility, located in LaVerna Village, has 120 skilled beds and 20 independent living units. It was built in 1974 and expanded in 1995. The SNF portion was 80% occupied, while the IL was at 100%. Combined revenues were about $12 million. Platinum Healthcare was the seller, and HFF received multiple bids for the portfolio.