A skilled nursing portfolio located around the Houston, Texas metro area with some operational and financial struggles found a new owner and operator with the help of the team at Helios Healthcare Advisors. Totaling 390 beds, these facilities were built in the last 10 years by the seller, a regional developer. However, newer vintage is no guarantee for successful operations, and the regional operator that leased the facilities faced difficulty maintaining high census and a good quality mix. There were also some clinical issues that further depressed referrals. These problems resulted in negative lease coverage and cash flow at the time of the sale.
So, Helios sourced a real estate investor to purchase the portfolio and lease it to an Oklahoma-based operator with a reputation for turning around distressed SNFs. The purchase price came to $27 million, or $69,200 per bed, which should leave some room for value creation, certainly considering the age of the physical plants.
