A HUD Debacle With SNFs?
One major default is used to blast a very profitable arm of the government. I don’t know if anyone noticed the June 3 lead article in The New York Times business section, but the reporter, Matthew Goldstein, should have talked to more people. One company, Rosewood Care Centers, defaulted on $146 million in loans secured by 13 skilled nursing and assisted living facilities in Illinois and Missouri. According to the story, it now demonstrates the “problems plaguing the HUD program.” Plaguing? Give me a break. Yes, it may have been likely that the buyer of these facilities in 2013 had few financing options given the two states’ reimbursement history, but that is one reason why HUD is supposed... Read More »
The Skilled Nursing M&A Market
Have we hit bottom, or will values continue to decline? Join us next Thursday as we try to decipher what the market holds for investors over the next several years. Depending on who you talk to, skilled nursing facility values, and the SNF M&A market in general, are going to be troubled for a while. Or, we have hit bottom, and with the new PDPM reimbursement system starting in a few months, SNFs will claim their rightful spot in the healthcare delivery food chain, with values increasing. That is quite a difference in opinion, and one where billions of dollars are at stake. Next Thursday, we are hosting a webinar on the skilled nursing acquisition market to try to decipher where it is... Read More »
Capital Senior Living and Brookdale Still In Price Tank
Stock values still hitting lows, but not cheap enough for big buyers to come in. I am not sure if you have been following it, but Capital Senior Living’s share price just hit a new low yesterday. In fact, the market value of the company is just $110 million. Think about it, some individual assets have traded at prices above this, and while the $110 million does not include the debt on its books, there have got to be buyers putting pencil to paper. Brookdale Senior Living is not faring too well either. But they aren’t buying into the low valuations, at least for now. The question remains, if things are not going to be much better six months from now, why buy shares now? You may as well... Read More »
Immigrants and Minimum Wage
Some board and care homes are giving the senior care business a bad name in their mistreatment of immigrants. There is an ugly side to immigration and low-wage workers in the senior care market. Bad people exist everywhere, and it is as difficult to keep them out of our business as it is in any other. There was a recent story about small board and care homes, usually under 10 beds, where immigrants work, usually 12 hour shifts or more, and often 6 to 7 days a week. And they often stay overnight to be “on call.” And that, apparently, happens a lot. And a large portion of these board and care homes are in California. There are some good ones, but it is the bad ones that get all the bad PR.... Read More »
The Forgotten Middle
There may be more than 14 million boomers that will not be able to afford seniors housing plus their health care needs. It is time to address the issue. We have been saying it for years. The largest unmet need in seniors housing is the bulging middle income cohort, which some researchers have defined as between the 40th and 80th percentile in terms of financial resources. In other words, the largest cohort. When they really start to need it in 10 years, more than 14 million seniors will not be able to afford the current assisted living or independent living models, plus the other health care needs they will have. Unfortunately, this has not been a secret. But it is one that has largely... Read More »Schedule a demo
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