• National Health Investors Sends Default Notice to NHC

    National Health Investors is addressing violations under its longstanding lease agreement with one of its largest tenants, National HealthCare Corporation. In July, NHI notified NHC/OP, L.P., an affiliate of National HealthCare Corporation and the tenant of 32 of NHI’s skilled nursing/senior care facilities and three independent living... Read More »
  • Sonida Senior Living Increases its Presence in Texas

    Sonida Senior Living finalized its acquisition of a seniors housing community in Texas. Built in 2016, the community features 62 assisted living and 36 memory care units. It shares a driveway with senior-centric healthcare providers and referral sources, and is across from a 294-bed hospital in Mansfield. The property is near existing Sonida... Read More »
  • Performing Class-A Asset Trades in Pensacola

    Berkadia handled the sale of Summer Vista, a seniors housing community in Pensacola, Florida. Managing Directors Ross Sanders, Dave Fasano, Cody Tremper and Mike Garbers of Berkadia Seniors Housing & Healthcare closed the transaction. Built in 2016, the 89-unit assisted living/memory care community has always been a strong performer. In fact,... Read More »
  • Gallaher Companies Launches Management Company

    Gallaher Companies, which has decades of experience in seniors housing design and development, launched Gallaher Signature Living, a management company that will oversee operations for the company’s growing portfolio of California seniors housing communities. Page Ensor has been appointed as Chief Executive Officer, bringing more than 25 years of... Read More »
  • Skilled Nursing Portfolio Secures HUD Loan

    Walker & Dunlop originated $68.312 million in HUD 232/223(f) loans to refinance seven skilled nursing facilities with 380 units in Illinois and Wisconsin. The transaction replaced existing short-term, variable-rate debt. Walker & Dunlop’s FHA Finance team arranged the refinancings, led by Joshua Rosen, Brad Annis and Johnny Rice. The... Read More »
Another Valuation Metric for the 2018 Seniors Housing M&A Market

Another Valuation Metric for the 2018 Seniors Housing M&A Market

In a year when both the assisted living and independent living average cap rates rose, how did the sectors’ average Gross Income Multiples (GIM) change year over year? Well, they accordingly fell off their 2017 levels, mirroring their changes in cap rate, according to The Seniors Housing Acquisition & Investment Report. The average independent living GIM fell to its lowest point in five years at 5.0x, while the assisted living GIM dropped 70 basis points to 3.2x, also a five-year low. The difference between the sectors can be explained by the higher risk of owning assisted living communities. The IL market, on the other hand, has seen far less new construction and more stable occupancy... Read More »
How Did Buyers Value Cash Flow in Seniors Housing M&A in 2018?

How Did Buyers Value Cash Flow in Seniors Housing M&A in 2018?

For the seventh year in a row, there was a perfect correlation between the age of seniors housing communities sold and their average net operating income per unit, according to the Seniors Housing Acquisition & Investment Report. This makes sense, given that the newer communities should better reflect the current demand (by unit size, amenities, etc.) and require less capex to maintain their competitiveness. Newer communities also have an easier time attracting good staff and charging higher rents. Those newest communities (built after 2013) had an average of $19,700 per unit of NOI, relatively consistent with recent levels. The next subset of properties built between five and 10 years... Read More »
What About the CCRC M&A Market?

What About the CCRC M&A Market?

The CCRC (or LPC) acquisition market, which we highlighted in the First Edition of The Seniors Housing Acquisition & Investment Report, is the thinnest of all the major sectors of seniors housing and care. The number of potential buyers is smaller, the lender and investor pool is smaller, and the number communities for sale each year is smaller. Because the market is not very active, we have grouped our statistics in two-year intervals (with the exception of the three-year period before the Great Recession) to minimize the impact of outlier sales at both extremes. Anecdotally, we have heard that the CCRC market is possibly faring the strongest of the seniors housing sectors. There has... Read More »
How Occupancy Impacted 2018 Assisted Living Values

How Occupancy Impacted 2018 Assisted Living Values

As we’ve mentioned several times, 2018 was a tough year for assisted living occupancy, as new development took its toll on a number of markets. Low occupancy often leads to lower operating margins and less cash flow, especially when operators feel the need to heavily discount their rates in order to fill beds, so it’s a serious issue for the industry. In our Seniors Housing Acquisition & Investment Report, “stabilized” means having an occupancy equal to or higher than 85%. And while there are some operators not pleased with their “stabilized” communities occupied in the 80s, it could be worse, and there was clearly a premium paid for existing census in 2018. Stabilized communities sold... Read More »
Older, Struggling SNFs Had More Weight In 2018 Market

Older, Struggling SNFs Had More Weight In 2018 Market

We have historically presented our cap rate analysis on an unweighted average basis, weighting the cap rate for a 60-bed skilled nursing facility and a portfolio of 20 facilities the same in our Skilled Nursing Acquisition & Investment Report (which you can still order here). Many buyers believe that a portfolio should command a lower cap rate than a single-asset sale, but that often depends on the quality of the portfolio and whether there are any stinkers in the portfolio. A weighted average cap rate thus removes this bias. What this has shown is that over time since we started separating out these two averages is that there has been very little difference between the two cap rate... Read More »
The ABCs of the Independent Living Market

The ABCs of the Independent Living Market

For some years now, we have separated out the assisted living and independent living M&A markets into a couple of quality-based categories, classified as “A,” “B,” and “C” properties. The determination is made by the property’s age, location and size, and there are always going to be some properties that can fit into either category. But they should balance out in the end. Some owners of “A” properties do not believe it is an apples-to-apples comparison between the quality of their communities and “B” and “C” communities in general, and probably vice versa. That is because the rates that “A” communities can charge and the margins they can operate at often exceed those of “B” and “C”... Read More »