Every now and then, there is a transaction that really highlights the two diverging skilled nursing markets. On the one side are the older, traditional SNFs that struggle with high Medicaid censuses, rising physical plant costs and shrinking operating margins, and often end up selling for under $50,000 per bed, or lower. Then, there are the newer, transitional care facilities that accept almost exclusively Medicare or private pay patients and feature more home- or even resort-like amenities. Two of these kinds of facilities just secured bridge financing from Berkadia valued at over $285,500 per bed. Imagine what price they would command in the M&A market.
Jay Healy of Berkadia’s Seniors Housing & Healthcare Group arranged the $21.7 million loan, with a floating rate, initial term of 18 months, and interest-only payments. Located in the western United States, including one in Idaho, the facilities were built between 2016 and 2017. Their 76 total licensed beds, all of which are private, average 97% occupancy with, of course, 100% Medicare patients. The borrower had operated them upon opening and utilized this bridge debt to acquire the real estate. They then expect to refinance the loan through HUD exactly three years after obtaining the certificates of occupancy.