Assisted Living Commands a Portfolio Premium in 2017
Every year in our Senior Care Acquisition Report, we try to determine what a market “portfolio premium” would be for assisted living communities, with a portfolio including three or more properties. However, just because there is a portfolio of properties, it doesn’t always mean that the buyer will pay more for them. The premium has to do with both the number of properties as well as the quality. In most years, there is a sizable difference in the average price per unit for portfolios compared with smaller purchases. In 2016, we recorded a drop in the premium to $45,700 per unit, or a 4% drop from 2015’s $47,600 per unit premium. Both premiums fall short of the record ($69,000 per unit in... Read More »
Senior Care Staffing Woes Continue
Too many stories about employee theft and abuse, and Medicaid and Medicare fraud, cloud the senior care industry’s future. I don’t know about you, but I am always surprised by how many stories I read about employee theft in senior care communities, Medicaid and Medicare fraud by skilled nursing owners, assaults by employees on residents who they are supposed to take care of. What is it about this industry that seems to attract people with, well, less than good intentions? On the fraud side, there is one answer, of course, and that is greed. The problem, however, is that some of these people get caught, and then come back under a different name or using a front LLC and start all over... Read More »
Quality Care Properties Getting Ready To Deal
Timing is everything. In the April issue of The SeniorCare Investor, we wrote about what the decline in financial performance at HCR ManorCare (HCRMC) from the 12-month period ending September 30, 2016 to the 12-month period ending December 31, 2016. Annualized EBITDAR dropped by $5.5 million which, although not a big number, was enough to cause fixed coverage to drop a little to 1.10x for the December 31 full-year period. At the property level, however, the coverage increased to 0.84x, a ratio that is still unacceptable and not sustainable. The company’s skilled nursing facilities are at 82.6% occupancy, which is also low for a company of its quality, and the 60 assisted living/memory... Read More »
March Madness and Washington Madness
While March Madness for basketball may be over, the madness in Washington with healthcare reform and Medicaid block grants may be just beginning. First of all, although I am not a gambler, and do not like to speculate in stocks, I do love to fill in my brackets for March Madness. And I have been participating in Randy Bufford’s Trilogy Health Services Madness group for about 10 years now. And….this year I came in fourth out of 695 participants, my second top five finish in 10 years. That’s the good news. The other good news is that, although we were subject to quite a bit of dysfunction in Washington two weeks ago, it looks like the skilled nursing industry has been spared the chaos that... Read More »Justin Hutchens a CEO Again
HCP, Inc. (NYSE: HCP) just announced that Justin Hutchens, elected president of the REIT in January, will be leaving to be CEO of HC-One, one of the largest care home providers in the United Kingdom with more than 300 properties. A little over two years ago, Formation Capital Safanad and Court Cavendish purchased healthcare property group NHP, which included the HC-One portfolio. Funding for that acquisition just happened to come from HCP, to the tune of about $630 million. In addition, it subsequently purchased 36 HC-One properties. So, HC-One and HCP are no strangers, and we believe that this did not come out of the blue, and that the HC-One investors decided that perhaps it was time to... Read More »Schedule a demo
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