Real estate investment firm Eagle Arc Partners has purchased a portfolio of three skilled nursing facilities in Massachusetts from an independent owner/operator seeking to exit the skilled nursing industry. The portfolio, which had an 80% average occupancy rate, comprises 384 licensed skilled nursing beds (359 functional beds).
All three facilities were located eight to 10 miles north of downtown Boston and had a five-star rating from Medicare. The facilities earned combined revenues of $40.7 million and had an NOI of $2.03 million, for a 5.0% margin. Not bad, but could certainly be improved. The state of Massachusetts recently instituted new legislation that would eliminate all three and four-bed wards for skilled nursing facilities, which could potentially reduce the portfolio’s licensed number of beds. But three- and four-bed wards don’t attract those private pay and Medicare patients, so it may not be an issue for the operations going forward. Eagle Arc paid $42.5 million, or $118,000 per functional bed, and will have its operating platform Stellar Health Group take over management. Evans Senior Investments handled the transaction on behalf of the seller.
