Nick Cacciabando and Jeff Binder of Senior Living Investment Brokerage closed a couple of Kansas deals in early May. First was the sale of two senior care facilities plus the leasehold interest of a third facility in southeast Kansas. A regional investment group consisting of three investors experienced in the industry had owned the real estate of two properties and leased the third facility from the eventual buyer, a Kansas-based operator with a large presence in the state.
The acquired facilities included Assisted Living at Windsor Place in Coffeyville with 32 units (licensed for 36 assisted living beds) and Windsor Place of Iola with 45 dually licensed skilled nursing beds. They were built in 2000 and 1970, respectively. Occupancy was stronger at the SNF with 81%, while the assisted living beds were occupied in the high-60s. Combined, they produced around $60,000 of EBITDAR on $4.4 million of revenues based on annualized four-month financials ended April 2021. Lastly, the leased facility was Windsor Place of Coffeyville, which was built in 1980 with 147 skilled nursing beds and 22 assisted living beds. The seller had leased it from the buyer for the last 30 years. The buyer paid a combined $5 million for the three assets.
Monarch Advisors, led by Alec Blanc, sourced $6.1 million of senior debt for the transaction. Monarch secured a commitment from a regional bank with a growing seniors housing specialty practice. The acquisition debt covered 100% of the total transaction costs including repayment of a small debt on a nearby facility owned by the buyer which they plan to close and consolidate into the acquired properties. The three-year loan was structured with no financial covenants and interest-only payments for the first 18 months converting to a 25-year amortization schedule thereafter. The rate floats at Prime + 1.25% during the interest-only period, then converts to a fixed rate at Prime + 1.0%.
Next, Messrs. Cacciabando and Binder sold an 82-bed SNF in Gardner (30 miles southwest of Kansas City). Built in 1975, the facility was 70% occupied and reported under $200,000 in EBITDAR on $4.43 million of revenues as of the 12 months ended October 2021. A Kansas-based company sold the facility to Recover-Care, a New York-based owner/operator with a significant presence in the state, including owning a rehabilitation hospital in town with a SNF license. The referral opportunity from that hospital prompted the deal, which came with a purchase price of $4.6 million, or $56,100 per bed.
