We previously reported on the sale of a skilled nursing portfolio in the Mid-Atlantic when Walker & Dunlop announced its Q1:23 activity, but after speaking to people familiar with the marketed portfolio, we have more details to disclose. Located in the Mid-Atlantic region, the portfolio consists of five skilled nursing facilities and nearly 770 beds, with four of the properties clustered around one major MSA.
These were older facilities, built from the 1960s to the 1980s, but were well maintained and showed well. The quality assets were also managed by a strong outgoing operator. As such, operations were strong, and the portfolio boasts a high Medicare census above 20% plus an operating margin north of 10%. Occupancy was in the mid-70s but trending up.
A publicly traded REIT divested the facilities to a national owner/operator for a purchase price of more than $200,000 per bed. Based on in-place EBITDAR, the cap rate was approximately 7%, but the buyer likely looked at future performance when capping the deal.
Walker & Dunlop’s Gideon Orion was the lead broker on the deal and also recently arranged the sale of six skilled nursing facilities in Maryland last September on behalf of a national owner/operator for $187 million, or around $250,000 per bed.
