Skilled nursing facilities do not pop up for sale in West Virginia often, but the state’s Department of Health Facilities (DHF) announced the planned divestiture and license transfer of four state-owned facilities and engaged Lument Securities to handle the transaction. The facilities include Jackie Withrow Hospital in Beckley (199 beds), John Manchin Sr. Health Care Center in Fairmont (41 dually certified beds), Hopemont Hospital in Terra Alta (98 beds), and Lakin Hospital in West Columbia (114 beds). They were built and/or were converted to skilled nursing care in the 1970s and 1980s.
These were struggling operations, as evidenced by multiple efforts in the West Virginia House of Representatives to close the facilities, citing poor financial performance and rising capex needs. Two of the facilities did hold four-star ratings from CMS, with the other two held two- and three-star ratings, respectively. All four had five-star staffing ratings, however, so they certainly were not understaffed. None were well occupied, hovering around 50%, but we understand that admissions are somewhat restricted at state-owned facilities, and their reimbursement rates are typically lower than at privately-owned facilities. So, operations should be able to turn around under new ownership, especially considering West Virginia’s relatively low bed count (a moratorium on new beds, with some exceptions, has been in place since 1987 in the state) and attractive reimbursement rates.
Lument will assist DHF in facilitating, “a sustainable long-term care strategy, leveraging private capital to revitalize the state’s nursing facilities,” which would include the sale and license transfer of the facilities. Lument launched an extensive marketing campaign to engage qualified investor groups with proven operational expertise. Plus, oversight of the transaction will be managed by the Department of Administration “to safeguard and preserve the interests of residents, stakeholders, staff, and the community at large.”
If you are interested in the portfolio, you can reach out to Laca Wong-Hammond at Lument Securities at Laca.Wong-Hammond@lument.com.
