A portfolio of six skilled nursing facilities in California was finally sold in multiple phases, with the two last facilities closing after the completion of HUD debt assumption and state regulatory approvals. The facilities sold for $154 million in total, and while the combined beds were not disclosed, pricing was reportedly strong on a per-bed basis and possibly a record for any portfolio SNF deal in the state, again on a per-bed basis. Gideon Orion of Walker & Dunlop facilitated the sale, his third over $150 million closed in the last 12 months.
Located in Southern California, the facilities were on the older side (typical of the state), having been built from the 1960s to the 1980s. But the outgoing operator, a legacy family operator with a strong reputation, kept the physical plants well maintained, with little deferred maintenance. Operations were strong, too, with good CMS quality metrics, a 20% Medicare census and stabilized occupancy in the mid-90% range.
With timing constraints due to regulatory changes in mid-2023 for the state of California, Orion was able to facilitate the transaction with the combination of a regional investor in healthcare real estate, in partnership with a publicly traded REIT. A well-regarded healthcare provider known to the regional investor and REIT established a new 15-year master lease with two, 5-year extension options to secure the deal.
