CIBC Bank USA closed on a couple of acquisition loans. First was a $5 million loan for a 70-bed skilled nursing facility in central Illinois. With an effective age of 25 years, the facility has been run by a regional operator for several years. The undisclosed buyer saw an opportunity to cut expenses and improve occupancy, with stabilized occupancy of 87% and margins in the mid-teens. Bank financing included a five-year term loan, with earn-out potential, plus a $750,000 working capital line of credit. Fritz Kieckhefer and Kyle Doran handled the financing for CIBC.
The same CIBC duo next provided $10 million in acquisition financing for a 42-unit behavioral residential care facility in Gresham, Oregon, about 20 miles east of Portland. Purpose-built in 2011, the facility recently received an increase in their state contract to now include all 42 beds, which will bring occupancy to 100% thanks to strong demand. That should also result in higher revenues, naturally, and performance improved over the last year since the bed increase.
The seller was a local owner, with this being their sole behavioral health asset. A private equity group based out West and looking to expand their portfolio ended up as the buyer, paying an undisclosed amount (although we imagine it is above $13 million due to the financing amount).
