Joe Shallow, Vice President of Prestige Group, represented a Midwest not-for-profit health system in its disposition of a 92-bed skilled nursing facility in Aledo, Illinois (Quad City area) to a private, for-profit owner, which Mr. Shallow sourced as well. Genesis Health System (not to be confused with for-profit Genesis HealthCare) had owned the facility which was built in 1970 adjacent to one of its hospitals. There was even an enclosed walkway built between the buildings in 2001.
The facility was kept in good condition and reported a solid quality mix between 45% and 50%, pretty good in this industry. It also boasted a 16-unit memory care unit that was newly remodeled and featured all private rooms. However, the facility was just 55% occupied and staffing expenses ran high (a common trait of not-for-profit-owned facilities). The new owner, Stern Therapy Consultants, owns 43 facilities in nine states (including Illinois) and should be able to use its scale to turn things around. They paid $1.38 million, or $15,000 per bed, to acquire it, leaving plenty of wiggle room to invest in improvements and to add value.
