Patrick Burke of Senior Living Investment Brokerage sold a pair of southern skilled nursing facilities to a Northeast-based real estate investment firm. Totaling 243 beds, the facilities were built between 1986 and 1990 and combined for 75% occupancy. The seller, an independent owner/operator, decided to exit the long-term care industry, after the problems started mounting at the Kentucky facility.
Litigation concerns and rising insurance premiums caused cash flow to plummet at the location. The Tennessee facility was essentially operating at breakeven, and combined, they brought in nearly $14.1 million in revenues. Around 36% of the census came from private pay and Medicare patients (not bad), with the balance coming from Medicaid. The buyer is making its first long-term care purchase but partnered with an operator also based in the Northeast that has experience in both Kentucky and Tennessee. They paid $12.15 million, or $50,000 per bed, for the facilities.