Senior Living Investment Brokerage facilitated two sales at the end of September in Missouri and Kansas.
The first, handled by Jack Kemper and Jeff Binder, is for the sale of two sister residential care (assisted living) properties in Kennett, Missouri for $7.5 million. The two communities were fully occupied in 2020, with The Haven participating in the Department of Mental Health network of facilities, allowing it to always maintain nearly-full census. The Haven was built in 2011, while its affordable sister property Southaven, was constructed in 2005.
The communities contain a total of 100 beds across 31,500 square feet, with the price-per-bed coming to $75,000. Combined revenues for the properties were $2.69 million for year-end 2020, and EBITDAR was $1.26 million during the same period, resulting in a cap rate of 16.8%.
The Haven and Southaven were family-owned and operated, with the seller looking to retire and exit the industry. The buyer is an Arkansas-based regional owner/operator who had previously operated in Missouri.
The second transaction, handled by Jeff Binder, Jason Punzel and Nick Cacciabando, featured the sale of The Healthcare Resort of Wichita, a skilled nursing and assisted living community in Wichita, Kansas. The property was priced at $10.1 million, or $107,400 per bed, and contains 94 beds in 90 units. The community was built in 2017 and spans 70,209 square feet.
While completed in 2017, a sale back to the developer, Mainstreet Property Group, was delayed at the time when the intended operator withdrew from the project. Mainstreet secured a needed bridge loan to complete the transaction which was predicated on securing a mutually agreed upon operating partner. However, Mainstreet failed to do this, so the lender sought foreclosure in May 2018, and the community’s opening was ultimately delayed until Q1 2019.
Revenues for The Healthcare Resort totaled $4 million, and there was negative EBITDAR of $1.2 million for the period ending March 30, 2021. Occupancy was approximately 35% at the time the facility was taken to market due to impacts from the pandemic, but increased to 55% during the course of the diligence period.
SLIB worked with the receiver and lender on the sell side, while the buyer is a regional owner/operator with operations in Nebraska, Iowa and Kansas. The Healthcare Resort is only certified for ten Medicaid beds (the rest being private pay or Medicare), but the buyer plans to finalize the process to dually certify all of the SNF beds. That should help with fill-up, as only seven of the current 44 SNF residents are Medicaid payors.
