Brookdale: Has The Long-Awaited Turnaround Begun?
Late on April 10, Brookdale Senior Living reported its March occupancy results, and disclosed that preliminarily, the first quarter financial results looked to be better than originally forecast. The market pounced on the news that first quarter adjusted EBITDA would be “meaningfully” above previously issued guidance. Revenue was higher than expected while expenses were in line with fourth quarter expenses, meaning little inflationary cost pressures. The share price surged by more than 30%. Finally, some good news. Let’s hope this is not merely a case of under-promising and overperforming, because if the second quarter does not come in better, then what investors giveth they and taketh... Read More »
First AlerisLife, And Now Diversified Healthcare Trust
Just weeks after AlerisLife was taken private in what we would call a bit of an inside deal, the REIT that owns most of its assets, Diversified Healthcare Trust (DHC), is being merged into Office Properties Income Trust (OPI), an office REIT with current tenant retention of about 50%. You know what they say when you have two lemons, time to make some lemonade. A little sugar may have to be added to make this one sweet enough. DHC had fallen on hard times, with a market cap of just under $300 million and a quarterly dividend of just one penny per share. Oh, and the share price had a range of $0.61 to $2.98 per share in the last 12 months, but had been over $8.00 per share in March 2020. In... Read More »
Eskaton’s Exit from Standalone SNFs
Not-for-profit senior living organization Eskaton announced that it was exiting its only standalone skilled nursing assets, totaling three properties in the Sacramento, California area. The facilities were Eskaton Care Center Manzanita, Eskaton Care Center Greenhaven and Eskaton Care Center Fair Oaks, which are selling for a combined $35.64 million, or $90,000 per bed. Built in the late-1970s and early 1980s, the portfolio totaled 396 beds and generated more than $42 million in 2022 revenues, according to a notice filed for the California Attorney General. However, occupancy was around 70% across the facilities, and each reported large operational losses in 2022. Eskaton employees were... Read More »
Walker & Dunlop Wraps Up Q1 with Six Transactions
With the first quarter wrapped up, Walker & Dunlop announced six closings totaling 13 assets located across the country. The largest deal was handled by Gideon Orion on behalf of a publicly traded REIT client. The five-facility skilled nursing portfolio is located in the Mid-Atlantic region and consisted of nearly 770 beds. A national owner/operator bought the properties for over $200,000 per bed at a cap rate of approximately 7% on in-place EBITDAR. Another portfolio sold, this time including three Class-A memory care communities in the Phoenix, Arizona MSA. Totaling 196 units and 258 beds, the properties were built from 2012 to 2016. A regional owner/operator bought them for an... Read More »
REIT Divests Struggling South Carolina SNF
A publicly traded REIT sold its 170-bed skilled nursing facility in Beaufort, South Carolina, for an undisclosed price. Brooks Blackmon, Amy Sitzman and Giancarlo Riso of Blueprint Healthcare Real Estate Advisors handled the transaction. Built in several phases beginning in 1969, the facility features mostly semi-private rooms. Prior to the pandemic, it had generated positive cash flows with occupancies exceeding 90%, but operations were significantly impacted by census and staffing headwinds as a result of the pandemic, thereby generating millions of dollars in operating losses. Blueprint was hired to run a confidential marketing process on a separate SNF that the REIT owned in... Read More »
Eads Investment Brokerage Closes Two Transactions in Missouri
Eads Investment Brokerage, a brand-new boutique seniors housing & long-term care brokerage firm led by Patrick Byrne, formerly of Senior Living Investment Brokerage, has closed $44.5 million in transactions in the past five months. Two recent closings totaled $13.5 million between the two. One included the sale of a not-for-profit CCRC in Concordia, Missouri, and the sale of a member interest in a 475-bed skilled nursing portfolio in eastern Missouri. Starting with the CCRC deal, the 200+ bed/unit campus sponsored by a Lutheran organization has been serving the local community for over 50 years. However, the pandemic took a toll on its operations, and some much-needed capital repairs... Read More »
M&T Realty Capital Reports Q1 Activity
M&T Realty Capital reported its Q1 seniors housing and healthcare loan activity, which comprised six transactions totaling $247 million. The largest transaction saw M&T Realty Capital work with M&T Bank on the closing of a $217 million syndicated senior term loan where M&T served as the administrative agent to support the acquisition of a portfolio of skilled nursing facilities in the Pacific Northwest. Next, M&T closed a $101.5 million bridge loan to refinance six seniors housing communities in Texas and North Carolina, which M&T fully underwrote on a very tight timeline. There were a number of agency financings, as well. They included a $52.5 million Fannie Mae... Read More »
Pacific Northwest AL Portfolio Gets Acquisition Financing
Monarch Advisors closed an acquisition loan for a portfolio of assisted living communities in the Pacific Northwest. The buyer, the current manager of the properties, engaged Monarch to source $7.3 million of senior debt for the transaction. Monarch’s Alec Blanc successfully secured a commitment from a national SBA lender, consisting of a $4.3 million, 10-year bank loan, fixed at 8.45% for the first five years, and a $2.6 million SBA Debenture expected to be fixed at around 6.3% for 25 years. In addition, there was a $300,000 SBA 7(a) loan floating at Prime plus 0.70% for 10 years. The debt covered approximately 80% of the transaction costs, putting the purchase price at roughly... Read More »
CFG Closes Acquisition Loan for Washington State SNF
Capital Funding Group closed a $3.3 million bridge-to-HUD loan for the acquisition of two skilled nursing facilities in Washington. Combining for 108 beds, the facilities were built in 1966 and 1964, respectively. CFG’s Managing Director, Long-Term Care Tim Eberhardt and Senior Associate Ava Julio originated the transaction for the company. The announcement follows the company’s recent closing of a $27.2 million construction loan for the conversion of a partially completed hotel to a 191-unit assisted living community in Sunrise, Florida. The financing was executed through CFG’s Seniors Housing Lending Platform. Read More »
60 Seconds with Ben Swett: Q1:23 M&A Activity Fails to Surpass 100 Deals
The first quarter is in the books, and M&A activity, to no one’s surprise, fell in the seniors housing and care market and seems to have settled at a new, lower level. We recorded 95 publicly announced transactions in the first three months of the year, which is down 15% from the 112 deals announced in Q4:22. You don’t have to go too far back in history to find a slower dealmaking quarter; that was Q1:21 when we recorded just 85 transactions. Vaccines were just starting to be distributed back then, and investors were understandably waiting to see the results, which, thankfully, were extremely positive and ushered in the busiest period of M&A activity in history. That brings up an... Read More »Schedule a demo
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