Chad Wegner of Senior Care Realty experienced a busy July, closing four separate transactions involving several seniors housing assets. First, Wegner facilitated the sale of an assisted living portfolio comprising three communities. The seller was a mom & pop with an existing footprint in the state.
Built in the last 20 years and all having been updated more recently, the communities each feature eight beds in Madison, Wisconsin. The residents are high-acuity, and it is mostly private pay. NOI was strong, with the seller running close to a 35% margin, putting the cap rate at around 12% to 13%.
The buyer, an existing in-state owner/operator looking to expand, paid $4.3 million, or $179,000 per bed. This was a cash deal through a reverse 1031, as financing would not be ready in time for the closing date, however, the buyer intends to refinance down the line.
Next, Wegner worked with a local broker to sell an assisted living community in Illinois on behalf of a real estate owner/operator that had previously leased the community. The pandemic took a toll on operations, resulting in default and the community sitting vacant for two years.
Completely remodeled in 2019, the community is in Gurnee and features eight beds. The buyer, a local owner/operator looking to add more beds to its portfolio, paid $1.4 million, or $175,000 per bed. Hurdles included financing challenges, with the outcome being seller financing through a land contract.
Wegner was additionally brought on by a mom & pop to facilitate the divestment of two stabilized assisted living communities that sit adjacent in Monroe, Wisconsin. Both were older vintages, and one comprises nine units and the other seven units, with a total of 20 licensed beds. One of the communities was renovated with an addition added in the last five years.
The buyer was an out-of-state multifamily investor looking to open and operate its first AL community. The purchase price was $4.0 million, or $200,000 per bed. Wegner also had to get creative with financing to get the deal done.
Lastly, Wegner, paired with a local broker, sold an assisted living community in Hartland, Michigan. The seller, a mom & pop, was looking to exit the industry and enter retirement. The buyer was a first-time owner/operator (a physician and nurse) looking to diversify its portfolio.
Built in 2000 and comprising 12 beds, the community was stabilized, though not performing well. The buyer, which had a lot of financial horsepower, secured financing and put a decent amount of cash down. The purchase price was $837,500, or $69,800 per bed.
Senior Care Realty has a robust pipeline, so keep your eye out for upcoming announcements.
