An old-fashioned 40-bed intermediate care facility (ICF) with 16 residential care facility beds (assisted living) located in the Willamette Valley region in Portland, Oregon was just sold for $9.65 million, or $172,300 per bed ($253,900 per unit). The relatively high per-bed price has all to do with performance, despite an old age.
The facility was originally built in 1955 with a renovation/addition in 2006. It has 29,000 square feet on 1.7 acres. Despite the pandemic, occupancy is a robust 98%, which we presume has been driving the financial performance. Based on three months annualized from September to November 2021, revenues and EBITDA were $6,053,500 and $983,300, respectively. That represents a very healthy 16% operating margin.
The cap rate came in at 10.2% and the effective gross income multiple was 1.6x. The cap rate is relatively low for this property type, and the EGIM is relatively high. But so is the 98% occupancy. The seller was an individual who is retiring from the industry, and one who probably kept a close eye on operations, and the buyer is a western-based regional operator looking to expand their presence in Oregon.
Jason Punzel, Brad Goodsell and Vince Viverito of Senior Living Investment Brokerage handled the transaction.
