Senior Living Investment Brokerage’s Bradley Clousing and Patrick Byrne sold a pair of personal care facilities in the Peach State. Both communities were losing money, largely as a result of heavy competition. It didn’t help that they were both built in the late-1990s, which is now considered to be old. The seller, MedProperties, even invested in updates over the years, but in the end decided to exit the operational outliers.
The first transaction featured a 64-unit assisted living/memory care community in Sandy Springs, an affluent suburb north of Atlanta, a notoriously overdeveloped market. MedProperties had acquired the community in 2012 for $6.6 million when it was operating at a 21% margin on over $2.6 million of revenues. Originally an all-Jewish community, but now open to all faiths, it saw occupancy decline to 55% and cash flow go into the red. A local owner/operator is now paying $5 million, or $78,100 per unit, to acquire the property and plans to focus on operations and a significant renovation going forward.
Then, in Savannah, MedProperties sold its 32-unit memory care community to Mainstay Senior Living for $2.05 million, or $64,100 per unit. That is slightly off of the original 2005 acquisition price of $2.3 million, but increased competition again took its toll as cash flow was about breakeven on $1.3 million of revenues. There is the potential to expand by 18 units (and the seller actually had architectural plans drawn up), but that will now be Mainstay’s decision. In addition to managing expenses, Mainstay will also rebrand the community.
