Cedar Communities, a New York-based private equity firm that targets undervalued, small to mid-sized assisted living communities, continued its expansion in the Southeast with the purchase of two personal care homes in northern Georgia. Built in the 1990s, both communities were recently updated, have good local reputations and limited competition in the area. Their owner decided to exit the seniors housing industry, prompting the sale.
The Commerce location features 54 units, 12 of which are independent living cottages, and the Stone Mountain property has 40 personal care units. They were well occupied at 93% and operated at a 25% margin on approximately $3.34 million of revenues. That leaves Cedar Communities some room to add value. They paid $9.75 million, or $103,700 per unit, at an 8.6% cap rate. Bradley Clousing and Dave Balow of Senior Living Investment Brokerage handled the transaction, and Aron Will, Austin Sacco and Matthew Kuronen of CBRE secured a non-recourse, floating rate bridge loan with two years of interest only though its multifamily bridge lending program, MF1 Capital, LLC, to fund the acquisition.
Mr. Clousing didn’t stop there. He also sold a 180-bed skilled nursing facility in Ocala, Florida for $24.325 million, or $135,100 per bed. The facility was operating near breakeven before the sale, but operations began to significantly improve during escrow when the asset started accepting managed care patients. Occupancy was in the 80s, and the facility was built in 2003, with a well-maintained physical plant. A private group based in New York emerged as the buyer.