Two skilled nursing facilities in Tennessee recently refinanced their debt with the help of CIBC Bank USA. Totaling 340 licensed beds with an effective age of 20 years, the facilities have been run by a local operator for a number of years. Under that management, effective occupancy has been in the 70% range, with EBITDAR margins in the high-teens, which is quite good for SNFs these days.
With that lower occupancy, we’re guessing there was a healthy Medicare and/or private pay patient census. Ownership obtained a five-year, $20 million loan on the real estate, also giving them some cash out. CIBC Bank USA also helped secured a $1.0 million capital expenditures facility for upgrades made to the building and a revolving line of credit to support working capital needs. Matthew Tyler and Neal Netzel of CIBC handled the transaction.
