Hands-off management led to a decline in occupancy at a senior care campus in Bay City, Michigan, and an ensuing sale was handled by Bradley Clousing, Ryan Saul and Joe Young of Senior Living Investment Brokerage. The campus consists of a 151-bed skilled nursing facility that was built in 1955 and completely renovated in 2007, and a 38-unit assisted living community added in 2001. The seller was retiring from the family business and exiting the industry after operating in it for more than 50 years.
Regulatory changes, new competition in the market and the health of the remaining family member made operating the asset more difficult in recent years. As such, the SNF was facing occupancy challenges and saw its bed count reduced to 120 beds. Both facilities were well maintained, but occupancy slowly declined to 65% across the campus. The campus was also losing more than $800,000 in EBITDAR on about $7.97 million of revenue.
So, a new owner, which ended up being a private New York-based group, was presented with the opportunity to improve census, quality mix and operating margin, while also potentially adding more assisted living units once occupancy stabilizes. They paid $6 million, or $38,000 per bed, for the facility.
