About three years after it acquired a 140-bed skilled nursing facility in Hatboro, Pennsylvania, Vita Healthcare Group decided to refinance the property with a HUD loan provided by Capital Funding. Craig Casagrande originated the $16.1 million mortgage, which takes out the original $13.36 million bridge loan and $1.5 million working capital loan provided by the firm to support the 2016 acquisition.
That original financing included a turnaround component that increased the loan amount based on projected improvements to the facility’s performance. So, assuming a roughly 90% loan-to-cost, the 2016 purchase price can be estimated just below $15 million, or $106,100 per bed.
In early 2016, the 40-year old facility was 83% occupied and given the turnaround component, we imagine the operating margin could have improved as well. Current operations are not known, but it appears the property’s value has improved substantially to over $20 million, if you assume a standard loan-to-value for HUD financings.