After owning and operating senior care facilities for decades, an ownership group seeking retirement from the long-term-care space enlisted Andrew Montgomery of Montgomery Intermediary Group to execute a lease-to-purchase agreement for a 40-bed skilled nursing facility in Missouri. The tenant/buyer was ANew Healthcare, a growing owner/operator run by Mark Hastings that is looking to expand its footprint in the region. ANew also closed on another lease-to-purchase deal in Missouri earlier this fall for a 60-bed facility. Montgomery handled that transaction, as well.
The current deal featured a 40-bed SNF that was built in 1964 in southwest Missouri. Its occupancy had ranged from 70% to 84% in the previous year. In this current capital environment, taking on the lease, rather than the outright purchase of the facility, can usually be the cheaper option and gives the buyer/tenant motivation to quickly improve occupancy, margin and quality of care to realize the higher value. Obtaining debt down the road will also likely (but not surely) be cheaper.
