Focus Healthcare Partners’ purchase of a struggling CCRC on Long Island has gone through the ringer, but Chief Judge Alan S. Trust of the US Bankruptcy Court for the Eastern District of New York just approved the sale under modified terms, which should close within the next two months. The property attracted some attention in late 2024 when New York State torpedoed the sale of the long-struggling CCRC in Port Washington, New York, to LCS, citing “a lack of required financial transparency” among other objections. The Harborside, formerly Amsterdam of Harborside, opened in 2010 as a 329-unit, not-for-profit community and filed for bankruptcy in 2014 and again in 2021. It was roughly half occupied and owed millions of entrance fee refunds to the families of deceased residents.
Under the terms of LCS’s bid, the company would have paid $63 million to the bondholders and an unknown amount of entrance fee refunds. Another $40.8 million in refund payments would also come from the planned sale of the Amsterdam Nursing Home in Manhattan, bringing the total bids above $100 million. The proposed deal was originally approved by a judge at the end of 2023 before the state Department of Health rejected the sale “in its current state” in October 2024. LCS then backed out of its pursuit of the community.
Then, after the debtor received several non-binding term sheets post-LCS, SR HSG Acquisitions LLC and Focus Healthcare Partners submitted a letter of intent to purchase the community for $80 million, or $242,400 per unit. Another payment of up to $4.0 million to cover the seller’s allowed administrative claims was also part of the consideration. In addition, according to the letter of intent, “the property and related assets shall also be conveyed to buyer free and clear of all existing and former resident contracts and contractual obligations, including but not limited to entrance fee obligations, obligations for future reduced rental rates upon change of resident acuity, and obligations for future lifecare/skilled nursing benefits.”
All independent living residents would have been offered a rental agreement, and if fewer than 45 IL residents sign a rental agreement, then Focus would receive a $5 million credit toward the purchase price. In order to allow for expedited closing, Focus would also not apply for assisted living, memory care and skilled nursing licenses prior to closing, meaning the property would sell without any operating AL, MC or SN beds. However, Focus did intend to apply for licensure after closing. But the community stays open (the IL portion at least), and Focus agreed to keep annual rental rate increases capped at 5%.
However, at the start of 2025, Chief Judge Trust declined to accept the offer unless the buyers also paid off approximately $100 million in entrance-fee refunds owed to residents and the families of deceased residents. So, an agreement was made that ensured that some of the residents who had worried about being displaced would not have to move, plus residents and the families of deceased residents would be paid about 25% of the entrance fee refunds owed to them. Focus Healthcare Partners will pay $86 million for the property under a new sale agreement, which includes $2 million that would go into the entrance fee refund pool. About $42.5 million has been set aside to pay $130 million in entrance fee refunds owed to residents and families of deceased residents, the bulk of which will be covered by the sale of the Amsterdam Nursing Home on Manhattan’s Upper West Side for $36.5 million by Harborside’s owner. Chief Judge Trust also approved Harborside’s plan to close its nursing facility, assisted living and memory care by March 14.
Focus plans to spend more than $20 million on capital improvements to the common areas and independent living units at the community, and will hire Chelsea Senior Living to run Harborside. Dave Kliewer and Jay Jordan of Continuum Advisors are handling the transaction.
