Flashback Friday
Twenty years ago, a well-operating 59-bed skilled nursing facility sold for $2.25 million, or about $41,000 per bed. With an occupancy of 95%, a 42% private pay census and a 15% operating margin, things were looking up for the 25-year old facility. However, in recent years, operations began to suffer with low occupancy and negative-to-breakeven cash flow as recent as early 2014. But the most recent owner/operator turned it around, stabilizing occupancy to around 90% and improving cash flow. Quality mix is currently in the mid-teens. Now, a regional owner/operator based in southeast Florida looking to expand its presence on Florida’s west coast is purchasing the facility, paying $4.9... Read More »
A Keene Eye
A week after Matt Alley of Senior Living Investment Brokerage handled the sale of a 110-bed skilled nursing facility located about 30 miles from Odessa, Texas, he struck again in the state, selling an 88-unit independent living/memory care community in the town of Keene. Built in 1988 and renovated in 2003, the community features 56 IL units and 32 units/36 beds of memory care. With the local owner/operator managing under a forbearance agreement with their lender, the community reached occupancy of 99% and a 28% operating margin. The buyer is a hospital provider headquartered in the Dallas-Fort Worth area and is owned by funds managed by an investment advisor. They paid $7.65 million, or... Read More »
More in the Lone Star State
Matthew Alley of Senior Living Investment Brokerage handled the sale of a 110-bed skilled nursing facility located about 30 miles from Odessa, Texas. Built in 1996, it has 37,043 square feet on 6.1 acres, but occupancy was just 67%. Revenues and EBITDA were $4.1 million and $744,000, respectively, but the EBITDA excludes about $384,000 in payments under the UPL program in Texas, which helps to supplement Medicaid rates. The purchase price came to $5.0 million, or $45,500 per bed, with a cap rate of 14.9% excluding the UPL payments. The seller was an owner and operator in central Texas, while the buyer was an operator in the Dallas area with several facilities in the region. Read More »
The Ensign Group and National Healthcare Investors Score Big
National Healthcare Investors (NYSE: NHI) announced a major transaction with Texas-based Legend Healthcare, an existing tenant. NHI has purchased eight skilled nursing facilities with 931 beds from Legend for $118.5 million, or $127,300 per bed. These will now be leased to The Ensign Group (NASDAQ: ENSG), which is a new relationship for NHI. In addition, Legend was already leasing nine SNFs from NHI, and two of these will be sold to Ensign for $24.6 million, or $100,400 per bed, and the remaining seven will be added to the new lease between Ensign and NHI, bringing Ensign’s total additional properties it is adding in Texas to 17, with 15 leased from NHI. The initial annual lease rate for... Read More »
Stat of the Day
You should know by now that skilled nursing facilities set a new record for the average price per bed sold of $85,900 in 2015, shattering the record set in 2014. What was driving this increase was the large number of high-priced sales, with a record number of transactions priced above $100,000 per bed. Because of this, the upper quartile price of skilled nursing facilities last year was $123,000 per bed, meaning that 25% of the sales were at this price or higher. Meanwhile, the lower quartile was just $44,000 per bed, meaning that 25% sold at this price or lower. We suspect many of these were more than 40 years old. These and many more statistics can be found in our just released Senior... Read More »Schedule a demo
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