After acquiring two skilled nursing facilities in Tennessee as part of a larger portfolio deal, a regional real estate owner, who focuses more on the CCRC market, decided to divest the properties with the help of Ryan Saul, Daniel Geraghty and Brad Clousing of Senior Living Investment Brokerage.
Located about 60 miles southwest of Nashville, the Mount Pleasant facility has 72 skilled nursing beds and 30 independent living units. Built in 1980 with additions in 1982 and 1996, it was 85% occupied and was losing about $200,000 annually. Originally built in 1967 with a renovation in 1988, the Lenoir City facility (Knoxville MSA) features 104 beds with a vacant 16-unit assisted living portion that was added in 1990. It was losing more than $230,000 a year and was only 52% occupied, but the facility received its Medicare certification in November 2018, so new ownership can hopefully benefit from the PDPM change. Bringing in about $9.04 million of combined revenues, they were previously leased to a third-party operator.
The facilities sold for $8.7 million, or about $49,000 per bed, with little to no value attributed to the IL and vacant AL portions. Going forward, the buyer plans to leverage its in-state scale to improve profitability at the Mount Pleasant facility, and they will close the Lenoir City facility to consolidate operations with its other nearby SNF. The staff and residents were transferred quickly to fill the other facility. SLIB closed the deal just 68 days from execution of the Letter of Intent.