A trio of small, well-performing assisted living communities in rural Idaho sold with the help of Blake Bozett and Spud Batt of The Zett Group. The pair represented a mom & pop who were looking to retire after nearly 25 years of operating. Terri and Carl Pendleton built the first 16-unit assisted living community in Gooding, Idaho, and added two more 16-unit buildings next to each other in Jerome, one focused on memory care that was built in 2011 and one assisted living building constructed in 2015. Together, they are known as DeSano Place Assisted Living.
Occupancy was strong across the board, averaging over 90% across the last two years with a 95% private pay census. Under the leadership of the Pendletons, the communities also saw very little staff turnover and commanded above-market rents. Combined, they operated at a roughly 15% margin on $3.0 million of trailing-six month revenues. Pretty good for small, rural communities.
Occupancy had briefly dipped nearly a year before marketing started, but census and margin quickly rebounded, so The Zett Group highlighted the more recent T-6 financials that were more emblematic of its typical operations. That is how the buyer saw it, too. Elton Development, a Meridian, Idaho-based commercial real estate developer, paid $5 million, or $104,200 per unit, at a 9.5% cap rate.
Elton Development focuses on residential, multifamily and commercial development and has a large seniors housing development underway in Eagle, Idaho. However, with the pace of development slowing, it decided to look for cash flowing M&A opportunities. They financed this acquisition through a combination of seller financing and a loan from a local credit union.
