Sabra Health Care REIT Buys Again
Fresh off the heels of its $3.0 billion merger with Care Capital Properties in August and its $430 million joint venture acquisition of most of Enlivant’s assisted living properties for an investment of $371 million, Sabra Health Care REIT announced a $430 million acquisition of 24 skilled nursing facilities with 2,216 beds, or a price of $194,000 per bed. That price will certainly help bolster what has been a mostly down year for SNF pricing, where we have seen more below-average facilities sold than in the previous two years. But this portfolio is certainly not average, with a 92% occupancy rate and a 59% skilled mix, which is huge for a portfolio of this size. In addition, 21 of the... Read More »
REIT Financing: RIDEA vs. Sale/Leaseback
During our recent webinar on REIT financing where we discussed the pros and cons of using the more traditional sale/leaseback structure, we posed a few questions to the audience. Let’s just say, the answers surprised us. The first was whether, if choosing REIT financing today, they would prefer the traditional sale/leaseback structure which involves fixed lease payments that increase every year, or the newer RIDEA structure, where they enter into a joint venture with the REIT and manage the properties for the joint venture. We assumed that most people would prefer the RIDEA structure given the nature of the sale/leaseback structure with 2.5% to 3.0% annual escalators. Wrong. A slight... Read More »
Skilled Nursing Facility Irma Fall-Out
Eight horrible deaths in one skilled nursing facility should not result in new regulations. By now we have all heard about the disaster at the skilled nursing facility in Hollywood, Florida where eight residents died from the heat during Hurricane Irma. It never should have happened, and we all have to wonder what the staff was thinking when inside temperatures soared and vital signs hit the danger zone. What we should have expected is politicians, regulators and other groups demanding more staffing so something like this does not happen again. While I agree that this should never happen again, I don’t agree that staffing levels should be re-evaluated as a result of one horrible event. And... Read More »Sabra Health Care REIT Invests In Enlivant
Sabra Health Care REIT has entered into an agreement to invest in a 49% interest in a joint venture that will own 183 senior living properties operated by Enlivant with the remaining 51% held by TPG Real Estate, which currently owns 100%. They have valued the transaction at $1.62 billion, or $195,600 per unit, with Sabra’s equity investment coming to $371 million. In 2013, TPG bought the former Assisted Living Concepts (ALC) for $458.5 million, or about $58,000 per owned unit, when occupancy had dropped to 60% after the company decided to get out of the Medicaid business. TPG changed the name to Enlivant, partly because there had been a few too many scandals associated with the previous... Read More »
REIT Financing: RIDEA or Sale/Leaseback
As healthcare REITs get ready to invest in 2018, it will be important for owners to know whether to go the traditional sale/leaseback route, or the newer RIDEA structure. Many of you have noticed that the volume of healthcare REIT financing has been lower the past couple of years, especially for those REITs that have been restructuring their portfolios. That is going to change. I suspect we will be seeing a turnaround in activity next year, and when that happens, it is best to be prepared. But prepared for what? Will customers want to continue with the traditional sale/leaseback structure that has been around for more than four decades? Or maybe a different twist on the old product? What... Read More »Schedule a demo
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