Senior Housing Properties Trust (SNH) continued its Five Star Senior Living (FVE) portfolio restructuring with the sale of 15 skilled nursing facilities in the Midwest. Mike Segal, Ben Firestone and Steve Thomes of Blueprint Healthcare Real Estate Advisors handled the transaction for SNH, which made a strategic decision to sell the entire portfolio in one deal to one buyer. The sale was part of SNH’s previously announced disposition plan to sell up to $900 million of assets in connection with the FVE restructuring.
The portfolio consists of 10 facilities in Nebraska, four in Iowa and one in Kansas, and sold for a combined $8 million. According to FVE’s 2018 Annual Report, the Nebraska facilities totaled 602 skilled nursing beds and were around 77% occupied with $31.4 million of revenues. The four Iowa facilities consist of 283 SN beds and 19 independent living units, with 79% occupancy and $17.2 million of revenues, while the Kansas facility has 56 SN beds and four IL units that were 86% occupied and brought in $3.8 million of revenues. That results in a per-bed purchase price under $10,000. Nothing else was revealed on the facilities’ performance, but the facilities have good star ratings from CMS.
Local press in Nebraska reported that Azria Health was the acquirer and immediately slated four facilities for closure in that state following the purchase, citing financial difficulties at those locations. Prior to the deal, Azria had three facilities in Olathe, Kansas and Omaha, Nebraska under its belt, so this acquisition represents a huge jump, operationally, for them. Oxford Finance LLC closed a term loan and a revolving line of credit to fund the purchase of 10 of the facilities.