Ray Giannini of Marcus & Millichap is close to closing the sale of a large skilled nursing facility in the Quad Cities region of Illinois and Iowa, although the process has not been easy. Featuring 245 beds and around 140,000 square feet on a 12-acre campus, the facility is owned by Rock Island County.
Built in 2007, it is actually the newest in the area, but heavy competition has kept census low (below 70%). Unfortunately, the facility has also operated at quite a significant loss for some time, too. But with such a relatively new physical plant, the opportunity is there for a new owner to turn operations around.
In September 2019, the facility was originally listed for $19 million, or $77,550 per bed. However, a bid of $6 million from Illinois operator Aperion was accepted by the facility’s board in February. The board then rejected that contract in May after Aperion lowered its offer to $3.6 million.
A new bidder, Infinity Health Care Management, stepped in to offer $4 million, which was followed by Aperion raising its offer also to $4 million. But at that time, the county learned of around $366,800 in fines from the Illinois Department of Public Health levied across Aperion’s 34 Illinois facilities. We imagine that news combined with Aperion’s low-ball offer led the county to select Infinity Health.
The sale could not come soon enough for the county, which acknowledged it soon could no longer support the facility’s finances. Around $662,500 in CARES Act funds for the facility certainly helped stave off any immediate action. The deal is expected to close in the next month. At such a large size and with local saturation of skilled nursing services, perhaps a reduction in bed size could be in store. Infinity will also be able to take advantage of economies of scale, with 14 locations in Illinois and more scattered around the Midwest and Southeast.
