Sherman & Roylance arranged a successful leasehold transaction for a 144-bed skilled nursing facility in Santa Cruz, California. The transaction allowed the landlord to diversify its portfolio and the new operator to expand its footprint in the California market. The facility, originally built between 1967 and 1970, currently operates at 70% occupancy. It attracted interest from several potential tenants before a new lessee emerged as a pair of an experienced skilled nursing operator and a businessman. They formed a new operating company to acquire the facility and are looking to grow along the West Coast.
The leasehold transaction was structured as a long-term, triple-net lease with key money and a graduated market per-bed lease rate. It closed successfully after the lessee obtained the necessary Change of Ownership (CHOW) approval from the California Department of Public Health.
