Blueprint Healthcare Real Estate Advisors announced its involvement in a couple of skilled nursing sales involving a total of nine properties. The larger deal featured seven facilities in the state of Texas, which after a competitive bidding process sold to a regional owner/operator with an extensive operating footprint in the state and an upcoming 1031 exchange event.
Geographically clustered in central and east Texas, the facilities were built in 1969, on average, and had a total of 564 beds. Before the pandemic, they boasted a strong operation with consolidated total revenues and EBITDAR inclusive of QIPP income exceeding $20.7 million and $2.5 million, respectively, in 2019. In addition, no facility accounted for more than 20% of total revenue. So, the potential is certainly there for an incoming operator with an existing regional portfolio.
The bidding process yielded six competitive written offers, and Amy Sitzman and Giancarlo Riso of Blueprint worked with all parties to ensure a smooth closing at the agreed-upon LOI price.
Next, Blueprint revealed that it advised AdventHealth in its sale of its Texas and Kansas skilled nursing facilities to CareTrust REIT. AdventHealth, a faith-based, not-for-profit health system based in Altamonte Springs, Florida, was looking to exit its out-of-state SNFs and sold the properties for around $17 million, or $60,000 per bed. CareTrust’s initial investment in the facilities, inclusive of capex commitments and transaction costs, was approximately $17.2 million.
The deal included AdventHealth Care Center Burleson, a 178-bed skilled nursing facility built in 1988 that was 48% occupied, and AdventHealth Care Center Overland Park, a 102-bed facility built in 1989 that was 61% occupied. Austin, Texas-based operator Momentum Skilled Services will operate Burleson going forward, and for the Kansas property CareTrust entered into a new tenant relationship with an affiliate of Summit Healthcare Management, LLC, a new Kansas-based skilled nursing operator owned by Ben Bryant, an experienced operator of skilled nursing and seniors housing facilities in the Midwest.
CareTrust funded the deal with cash, which probably helped the REIT’s bid. Initial annual cash rent for the facilities will be approximately $1.63 million. The initial term of Momentum’s master lease with CareTrust was also extended by four years in connection with the transaction. The lease with Summit Healthcare provides for an initial term of fifteen years with two, five-year renewal options and includes annual, CPI-based escalators. Blueprint’s Michael Segal and Ben Firestone worked on the deal.
