Hurricane-Damaged SNF Sells in Georgia

Despite a wing still not operational since Hurricane Matthew in 2017, a skilled nursing facility in Midway, Georgia changed from one not-for-profit’s hands to another’s. Magnolia Manors, a Methodist-affiliated operator of eight other locations throughout south Georgia, acquired the 150-bed facility for a sum of $6.85 million, or $45,600 per bed. Mike Pardoll of Marcus & Millichap handled the deal.

Originally built in 1972 with an addition in 1982, the facility, which is licensed for 169 beds, was 75% occupied during the marketing period, with a 15% Medicare and 9% private pay/managed care census, with the remainder made up of Medicaid patients. About $7.8 million of bond debt remains with the facility. EBITDA surpassed $1.4 million on approximately $7.16 million of revenues, for a 20% operating margin, which is very good for skilled nursing.

Cadence Healthcare Solutions had previously leased the facility as a third-party operator, but agreed to terminate the lease upon the sale. For the new owner, a lot of work remains to renovate the facility and reopen the damaged wing.

Mr. Pardoll also sold a 50-bed skilled nursing facility in Gastonia, North Carolina (Charlotte MSA). If that looks familiar, it’s because we reported on Contemporary Healthcare Capital’s financing of the deal last week. Built in 1969, the facility was 80% occupied with a mostly Medicaid census but also 17.5% private pay/insurance and 10% Medicare. Ivy Senior Living, a New Jersey-based group that operates a number of properties in North Carolina, paid $1.5 million, or $30,000 per bed, for the facility, obtaining both a senior loan from Millennium Bank and Alliance Bank, and a $504,750 mezzanine loan from Contemporary. The combined loans will fund the acquisition, a $200,000 working capital line of credit and $200,000 for facility renovations.

 

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