Mike Pardoll of Marcus & Millichap has spent the last few months crisscrossing the Southeast, closing a number of seniors housing and skilled nursing transactions along the way. Starting in Dickson, Tennessee (Nashville MSA), he represented a private individual in selling their 70-bed skilled nursing facility to another private individual buyer. Leased by Mission Health (an affiliate of the private equity firm Windward Health Partners) as part of a 10-facility lease that includes other SNFs in Tennessee and Georgia, the facility was originally built in 1974. It was well occupied at 90% and produced around $930,000 in annualized 2018 EBITDA. The current lease is $31,000 per month, which runs through 2028. The purchase price was $3 million, or $42,900 per bed.
Mr. Pardoll then went to Bainbridge, Georgia to handle the sale of a 23-unit personal care community. Operations could be improved at the 22-year old community, as it was 83% occupied and operated close to breakeven on more than $475,000 of revenues. Rents are on the low side at around $2,600 per month, with two units rented to couples at $5,000 per month. The community does, however, have the benefit of being located next to a skilled nursing facility. A private owner sold the community to Affinity Living Group for $1.2 million, or $52,200 per unit.
Affinity also purchased a 36-unit senior living community in Vidalia, Georgia, for $1.3 million, or $36,100 per unit. Mr. Pardoll represented the private owner/operator in the sale, which included 24 units (48 beds) of personal care and 12 senior apartments. Built in 1982 and renovated in 1997, the community was losing money on nearly $500,000 of revenues but is projected to break even in 2019. Monthly rents average $2,286 for the personal care and $1,070 for the apartments. There is one other 24-unit personal care community in town, so Affinity may not have much ability to raise rents, but their scale should help in reining in expenses.
Finally, Mr. Pardoll sold a portfolio of four skilled nursing facilities located throughout Florida. All built between 1983 and 1985, they were previously owned by four families and leased to a third party. Three consist of 120 beds each (Fernandina Beach, North Port and Haines City), while the fourth (in Winter Garden) has 100 beds. Occupancy averaged 84%, with a 39% average quality mix, and 2018 annualized EBITDARM came to $6.5 million, on over $43.7 million of total revenues. That 15% margin is pretty good, especially considering the facilities’ age. Each property is also in the process of getting a new generator to abide by new regulations. Cascade Capital Group purchased the portfolio for $49 million, or $106,500 per bed, at a 13.3% cap rate and leased the operations to Citadel Care Centers. Well done to Mr. Pardoll on these four varied transactions.