The team at IPA Seniors Housing including Mark Myers, Josh Jandris and Ryan Fleming announced a couple of public-to-private senior care sales, something the IPA team has seen a lot of in the past several years. Both properties were previously owned by local government and attracted buyers with an eye to adding value. The first sale featured a 36-unit senior living community built by the City of Monona, Iowa in 2005 that was operating well (with occupancy consistently above 85%) but did not align with the City’s eventual consensus that they should not be in the senior living space. Before the sale, the City did invest considerably in capex, including installing new windows and exterior siding, and sold the community to a large owner/operator in Iowa for just under $80,000 per unit.
Next, Messrs. Myers, Jandris and Fleming arranged the sale of a 168-bed skilled nursing facility on behalf of Black Hawk County in Iowa. Originally built by the county in 1954 (and operated by them ever since), the facility underwent additions in 1977 and 1988 and received a number of renovations and replacements in the last 10 years. However, exorbitant union benefit costs led to multimillion-dollar annual losses at the facility, prompting the county’s exit. At the time of the sale, the facility, which featured a 20-bed behavioral health unit, was generating over $10 million of revenue, with a high Medicaid census and occupancy vacillating between 75% and 85%. The new owner, a private equity group based in Chicago, will look to boost the Medicare mix and cut expenses, a job made easier by the union being gone upon acquisition.
