There was some buzz around a major skilled nursing portfolio deal in Texas closing during the NIC Fall Conference, and indeed, Dwyer Workforce Development (DWD), the 501(c)(3) not-for-profit started by Jack Dwyer (the owner of Capital Funding Group) and his family in 2021, announced its $590 million acquisition of 50 facilities in the Lone Star State. Continued to be operated by Regency Integrated Health Services, the portfolio will transition from for-profit to not-for-profit under the deal.
DWD has tasked itself with three basic missions: solving systemic poverty, creating new career opportunities for those who lack opportunity, and reducing healthcare staff shortages at facilities across the country. Working with other not-for-profits and workforce development organizations, its students, or “Dwyer Scholars” as they are called, complete their training, participate in clinicals, and then take the Board of Nursing exam. Once certified, DWD then places Dwyer Scholars into full-time positions through its network of long-term care industry partners (and now potentially its own facilities) to support the workforce and improve the lives of seniors. Plus. case managers will track the students’ career paths and provide support along the way, whether it be childcare, transportation or even housing.
So, seeing DWD as the purchaser of such a large portfolio was a little surprising. But having started with the backing of Jack Dwyer, the organization can use the cash flow generated by the portfolio to help fund and expand its mission. And the portfolio was apparently producing significant positive cash flow, as occupancy approached pre-pandemic levels around 80% and the case mixes remained strong.
With approximately 130 beds per facility, the price for the portfolio comes out to around $90,000 per bed. A group of three owners had acquired the portfolio over the past eight years, including purchasing a major tranche of more than 30 Regency-developed facilities in Texas in 2016 for over $110,000 per bed. Capital Funding had worked on that deal too.
To fund the 2022 deal, DWD received bridge and mezzanine financing from a publicly traded REIT and multiple banks, including CFG itself. Going forward, the day-to-day operations will not change, but DWD plans to increase the staffing levels across the portfolio. We imagine DWD will practice what it preaches at the facilities it owns, that is for sure.
