There was another acquisition financing closed by CIBC Bank USA, following the bank’s funding of an Indiana skilled nursing portfolio acquisition and cash-out refinance of a SNF in eastern Kentucky earlier this month. The recent transaction was arranged for a 55-bed skilled nursing facility in northeastern New Jersey. With an effective age of 10 years and occupancy in the 90% range, the facility was operating strongly at EBITDAR margins around 15%. That makes for quite a desirable acquisition.
So, a local operator that had been leasing the facility bought it for an undisclosed price but utilizing a $6.3 million acquisition loan from CIBC. As a result of the loan, the price most likely had to be well in excess of $115,000 per bed. New Jersey is one of the priciest SNF markets in the country. In addition to the five-year loan, the bank also provided a revolving line of credit to support working capital. Matthew Tyler and Neal Netzel handled the transaction.
CIBC was familiar with the borrower, having previously provided a $10 million financing for its August acquisition of a 110-bed skilled nursing facility located in the Philadelphia metro area. That building also had an effective age of 10 years, occupancy around 90% and EBITDAR margin approximating an impressive 20%.
