Bob Richards of Senior Care Realty drew on his years of experience to close three sales of assisted living communities located throughout Wisconsin. First up, he represented an individual owner in her sale of a 50-unit AL community in a small town about 25 minutes outside of Green Bay. Originally built as a 16-unit community in 1997 but expanded by another 34 units in 2002, it was well occupied at 91%. However, its private pay census was between 15% to 20%, limiting its cash flow, which was over $350,000 on $1.46 million of revenues. The new owner, AC Capital Partners, will look to improve that census mix, using their experience and existing presence in the state. The final purchase price came to approximately $3.5 million, or $70,000 per unit, at a 10.4% cap rate.
Then, also in the Green Bay area, Mr. Richards sold two assisted living/memory care campuses on behalf of another private owner. Operating under Angels Assisted Living, the campuses are located about 10 miles apart and feature two 15-bed buildings at one and three 20-bed buildings at the other, all built between 1996 and 1998. They averaged about 95% in occupancy, with a 20% private pay, but the rents were considered to be below market.
The buyer, a group of Southeastern-based individuals with several other assisted living communities in the South, plans to change that through renovations that hopefully would attract more private pay residents. Health Dimensions Group will take over operations. This is the first Wisconsin deal for the buyer, but likely won’t be the last. In the end, they paid $10 million, or $116,300 per unit, for the portfolio, at a 9.7% cap rate.
Finally, Mr. Richards helped a not-for-profit divest one of its assisted living communities in Milwaukee that was struggling to break even. Built in 1997 with 28 licensed beds in 24 units, it was just 80% occupied with a low 5% private pay census. Under ownership by Wisconsin Lutheran Living Center, expenses ran high, which the buyer, a private owner that owns several small AL communities in the area, plans to immediately rein in, in addition to increasing occupancy. In fact, since the deal closed, census has already trended upwards. Being a value-add acquisition, the purchase price came to $1.45 million, or $60,400 per unit, with no market cap rate.
