The second property in the receivership sale of a four-facility portfolio in Oregon has sold, with Mike Merrill of Merrill Commercial Real Estate representing the receiver in the deal. This transaction involved a 69-unit independent living community in North Bend, near Coos Bay where the first property of the portfolio sold in August (handled by Tyler Merrill). In fact, the four properties represented a continuum of care for the local area.
The North Bend community was built in 1986 and its census steadily improved throughout due diligence to reach 80% at the time of the sale. It was bringing in around $340,000 in NOI on approximately $1.74 million of trailing 12-month revenues through September. A 19.5% operating margin could certainly be improved for an independent living community, but the NOI improved significantly to $403,000 at the time of the sale, so the new owner will be able to hit the ground running.
A California-based investment group that was previously focused primarily on the multifamily market paid $4.05 million, or $58,700 per unit. That represents an 8.4% cap rate, or a 9.95% cap rate based on the improved financials at the time of sale. There was no change in purchase price or lender as a result of the pandemic, but there were a couple of extensions because of the debt market freeze from earlier this year. Few were not affected by that.
