Skilled Nursing Reimbursement Under Trump Care
Record prices per bed for skilled nursing facilities don’t seem to make sense given the reimbursement changes looming. The skilled nursing acquisition market has been booming for the past few years, with back-to-back-to back record average prices per bed. But with all the uncertainty surrounding the future of Medicare reimbursement, not to mention Medicaid and the potential for block grants, it does seem odd that there is still so much interest in the skilled nursing market. Reimbursement, however, isn’t the only story, and there are many providers, despite the reimbursement uncertainty, who can take over a facility and still increase revenues, increase reimbursement rates and... Read More »
New Senior Living Investment Fund
A new investment fund called Senior Living Fund is in the market and funding new developments with enticing promotional returns to investors. There is a new investment fund on the street, called Senior Living Fund, which is mostly investing in to-be-built private pay senior living communities. In their Senior Living Fund IV – USA, investments can range from as small as $50,000 with a preferred monthly cash return of 7.5%, to more than $1.0 million with a cash return of 10.75%. Or, investors can pay a discounted per-unit price and receive more of the return on the back end with the ultimate sale of the property. That is for investors less concerned about receiving a steady monthly check.... Read More »
Real Estate vs. Business Value For Healthcare Properties
Acuity level can impact what is driving business value and real estate value in healthcare properties, something all lenders and investors should understand. The separating out of business value from real estate value in healthcare properties has always been a controversial issue. When lenders lend against the value of an LTAC or a skilled nursing facility, their security interest is really in the real estate, and not the business. But the real estate without that business, without that CON or license, can see its value drop quite suddenly. Should anyone care where the values lie if they are really looking at the full enterprise value? Absolutely. What happens if a facility is old, has... Read More »
To Settle Or Not to Settle
Sometimes, when people search for problems at a senior living provider, it just gets absurd. I read this week a story in McKnight’s about a senior living provider who was sued and settled on a payment of a few hundred thousand dollars for the “crime” of not having sign language interpreters available. My reaction was, you’ve got to be kidding! No one had asked for sign language interpreters, but apparently someone went in “undercover” and found out they were not available. Imagine that. Obviously, I have nothing against the deaf, and my hearing is beginning to go, but to be coerced into forking over a few hundred thousand dollars for not having a service that was not asked for, well, this... Read More »
The Big Deals Are Upon Us Again
Sabra Health Care REIT and Care Capital Properties announced their merger in a somewhat negative SNF market for REITs. When I wrote the lead story for the May issue of The SeniorCare Investor talking about the return of the “Big Deal” to the market, I hope you didn’t think I had any inside information. Just days after it was published, Sabra Health Care REIT and Care Capital Properties announced their merger. I had written that a REIT buying a smaller REIT could make sense, except that one of the problems with that type of deal is that you end up with a certain amount of unwanted assets. That said, the transaction makes a lot of sense for both REITs. Separately, their cost of capital was... Read More »Schedule a demo
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