Juniper Communities has completely exited the state of Florida, with Bradley Clousing and Jeff Binder of Senior Living Investment Brokerage facilitating the final sale. With the transaction, the assisted living/memory care provider will now focus on its established Northeast and Colorado markets, where it has eight communities in Pennsylvania, two in New Jersey and five in the Centennial State.
The Naples community was originally built in 2000, which in the heavily developed southwestern Florida market is certainly on the older side. Age isn’t everything, but it does usually affect the rents you can charge, which has a cascading effect if any fixed or variable costs were to suddenly shoot up, like labor. Operations could be improved at the location, which was bringing in nearly $310,000 in EBITDAR on $3.2 million of revenues, for a 10% margin.
It should be noted that throughout 2017 and 2018, the community underwent significant capital improvements, which took a toll on its financial performance as units have to be taken out of service. Units got new kitchens with new appliances plus updated cabinetry, light fixtures and flooring. The common areas received a refurbishment too. Designed with 12 units each in five separate residential cottages (60 in total), the community is now reopening the fifth cottage which should increase occupancy from its current 80%. So, things are looking up, generally. Opal Senior Living, a regional owner/operator looking to grow its presence in Florida, emerged as the buyer, paying $5.5 million, or $91,700 per unit, at a 5.6% cap rate.
Six months ago, Messrs. Clousing and Binder also helped Opal acquire Juniper’s 80-unit assisted living community in Cape Coral, Florida (Fort Myers MSA), for $6.276 million, or $78,400 per unit, at a 9.75% cap rate. The community was originally built in 1982 and substantially renovated in 1995. It operated at a 19% margin on approximately $3.2 million of revenues; better than the Naples property, but still some room for improvement. Occupancy was around 94%.
Florida isn’t Opal’s only target market these days, however. Last month, the company also bought a 60-unit assisted living/memory care community in Nashville, Tennessee. The purchase price came to $4.05 million, or $67,500 per unit, financed in part by a mezzanine loan from Contemporary Healthcare Capital and a senior loan from CoastalStates Bank. Built in 1982, this was an old Skyline SNF that was emptied and closed down, substantially renovated and re-licensed, and finally opened as an AL/MC community in 2018. It is in the middle of filling up its 60 assisted living and 55 memory care beds across the 60 units, which should be helped by that fact that the community is one of only two in the metro area to accept Medicaid waiver residents.
