A family-run organization is getting out of the skilled nursing business (along with many other mom & pops across the country) and sold its 63-bed facility in northwest Massachusetts. Built in the mid-1960s, the facility was also operated by the seller but recently experienced a census decline from the mid-80s to the high-60s. That is because the Massachusetts Department of Public Health recently proposed and implemented a removal of all three- and four-bed wards at SNFs in the state. The industry has been moving past wards for a while now, but some operators of older, mostly Medicaid facilities rely on them to fill beds and cover their overhead costs. With Medicaid reimbursement rates as relatively flat as they are and expenses soaring, it’s no wonder smaller owners of older facilities are seeking to retire from the business. And at this facility, there was no positive cash flow.
The seller originally worked with Helios Healthcare Advisors in the first quarter of 2020, but the pandemic and above-mentioned regulatory changes delayed the deal. However, Helios was able to keep the original contract together and closed the sale for the initial purchase price of $3.5 million, or $55,500 per bed. The undisclosed buyer worked with the state to obtain waivers that allowed them to convert the wards into semi-private rooms to ensure compliance post-close.
