In a different sort of transaction than Senior Living Investment Brokerage’s recent Oregon deal, the team of Brad Goodsell, Jason Punzel and Vince Viverito handled the sale of a value-add property in California. Located about 12 miles southeast of Los Angeles, this 77-unit assisted living and memory care community was built in 1984 with a renovation in 2017. Occupancy was closer to where the rest of the industry has been near the end of the pandemic at 76%.
A local owner/operator paid $7.7 million, or an even $100,000 per unit (certainly makes the math easy), with an in-place cap rate of about 7.7%. With the low occupancy, the operating margin is just under 19%, which certainly will be improved on as census levels across the country start to rise. Helping toward that goal, the buyer plans to make some renovations to the property. The $3.2 million of revenues should start to rise, as will the $600,000 of EBITDA. While it is licensed for 92 beds, we are not sure how popular any of the semi-private rooms will be right now.
The seller was a regional owner/operator who is looking to divest from the senior care space. Perhaps some more transactions by way of SLIB?
