We don’t see many of them nowadays, but a stabilized skilled nursing facility sold this month, with Ryan Saul and Toby Siefert of Senior Living Investment Brokerage representing the New Jersey-based owner of an 84-bed SNF in Elizabethtown, Pennsylvania. The SLIB guys found another New Jersey-based individual to take over the facility, which is his first property after working as a COO for a large health care capital group.
This 55-year-old facility includes 45 skilled nursing and 39 personal care beds, mostly in semiprivate rooms. It boasted strong operations, including 98% occupancy, 38% Medicare census and a strong Medicaid rate. It also benefits from a lower bed tax with its CCRC designation.
Unfortunately, the facility encountered COVID early in the pandemic, leaving nearly all residents and several staff testing positive. There were also a few deaths, a case all-too familiar at facilities across the country, but operations remained strong thanks to higher rates, new admissions and being the preferred short-term rehab facility in the area. Through the end of May, annualized revenues and EBITDAR were approximately $7.375 million and $2.235 million, respectively, for a 30% margin.
After acquiring the facility a few years ago and improving cash flow from negative to that high margin, the previous owner sold it for $11.5 million, or $136,900 per bed. We’re not sure of the ROI on the deal, but we think the client was happy walking away.
