More Trouble Brewing in Credit Markets
We had all heard that the first half of this year was going to see a spike in loan defaults, forced sales of properties and other signs of financial distress in the seniors housing and care sector. But we are not sure many people thought there would be one this big. We are talking about the TPG Real Estate and Sabra Health Care REIT joint venture involving 157 assisted living communities in 18 states operated by Enlivant, which is the former Assisted Living Concepts. This was not a great portfolio to begin with, and it consists of mostly small and older properties in secondary markets. Sabra purchased a 49% interest in the portfolio in January 2018, paying a hefty price to help the... Read More »
Some Good News For A Change
There has not been much good news out there, whether on the financing front, the deal volume front, or the census front. But some operators are actually kicking some butt these days, specifically Bloom Senior Living. When the pandemic began, this small operator had an average 83% occupancy across its portfolio of independent living, assisted living and memory care units. One year later it had plunged by 1,600 basis points to 67% and bottomed out in March 2021, like so many other providers. Just 12 months later, however, and not like many others, it had gained back 1,300 basis points to reach 80% in March 2022. Not quite to pre-COVID levels, but certainly a lot better than many other... Read More »Industry Leader Passes Away
I was saddened to learn that my friend George Chapman has just passed away. I had known George since the 1980s when he was working under Bruce Thompson, the co-founder and CEO of Health Care REIT (now Welltower). We started with a very friendly relationship when Bruce found out that he and I both went to the same Connecticut prep school. Bruce never let it drop, and George continued on with the teasing over the years. Back then, I never saw one without the other. Not many people know that Health Care REIT started as the Health Care Fund, and then changed its tax status to a REIT. It was the first healthcare-focused, and really long-term care focused, REIT in existence. And this was when... Read More »
60 Seconds with Steve Monroe: SNFs, Here We Go Again
As long as they keep making some stupid conclusions, I am going to have a say on it. I am talking about the most recent study appearing in Health Affairs blasting PE and REIT ownership for a lack of transparency and a cut in nursing hours after an acquisition. First, I do agree there should be more transparency in general since nursing homes are receiving about 90% of their revenues from the government. But once again, these researchers seem to be missing the point and simply jumping on the Elizabeth Warren and Bernie Sanders bandwagon. Or is it Joe Biden? When a REIT buys a nursing home, it has little say over the operations, but can advise the provider, especially if things go... Read More »
Newmark Sells The Preston of the Park Cities
The team at Newmark has kept a steady stream of closings coming amid the capital markets upheaval of the last month and just announced the sale of a 134-unit assisted living/memory care community in Dallas, Texas. The Preston of the Park Cities was built in 2018 in the desirable neighborhood of Park Cities. Silverstone Senior Living developed it, initially bringing in Harbor Retirement Associates to operate before switching to Watermark Retirement Communities in 2019. Occupancy never reached full stabilization before the pandemic and stood at just 75% at the time of closing. The Newmark team had some history at this property, as Ryan Maconachy, Chad Lavender and Sarah Anderson helped to... Read More »
Debt Issues Don’t Stop Portfolio Deal from Closing
The difficult debt markets didn’t stop MED Healthcare Partners from acquiring a portfolio of three assisted living/memory care communities in Georgia thanks to their use of an all-equity capital structure to finance the purchase. Located in secondary markets around an hour outside of Atlanta, Georgia, the small, 1990s-vintage communities totaled 156 units and were not stabilized at the time of closing. However, operations were improving throughout the sale process and the middle-market portfolio was well-positioned to capitalize on the strong demand for more affordable senior care within their respective local markets. Blueprint Healthcare Real Estate Advisors generated three... Read More »
CFG Closes Construction Loan for Hotel Conversion
Capital Funding Group closed a $27.2 million construction loan for the conversion of a partially-completed hotel to a 191-unit assisted living community in Sunrise, Florida. SGSL Fee Owner LLC, based in Coral Gables, Florida, originally acquired the 291-room Sawgrass Grand Hotel and Suites and the 11.6-acre site in 2019 for $15.13 million and had started converting it into a 184-unit assisted living/memory care community, thanks to a $35.8 million bond. However, UMB Bank, which was the trustee for the bond, filed a lawsuit against SGSL Fee Owner over allegations that it missed bond payments and wasn’t paying its project contractors and suppliers. A judge appointed Travis Grody of Aurora... Read More »
Invesque Inches Closer to SNF Exit
Invesque released its fourth quarter and full-year 2022 earnings, and announced that it is making progress in its refocus towards a private pay, seniors housing portfolio. During the fourth quarter and subsequent to year-end, Invesque sold or entered into a purchase and sale agreement for two medical office buildings for a combined $12.03 million. With the sales, which included Brantford Medical Center in Brantford, Ontario and MetroWest Medical Center in Orlando, Florida, Invesque exited the Canadian MOB market and has two MOBs remaining in the United States. Plus, sales of two remaining MOBs are expected to occur over the next few months. In addition, Invesque entered into a purchase and... Read More »
Carnegie Capital Secures SNF Bank Refinance
JD Stettin of Carnegie Capital closed a bank refinance for a 90-bed skilled nursing facility in north central Texas. Built in the 1980s, the facility was acquired by the borrower less than two years ago. It was occupied in the high-80s, and while cash flow was positive (with around 30% of its NOI derived from QIPP revenue), it did not cover debt service yet. So, ownership sought a bank refinance totaling $7.0 million. The loan came with an interest rate of 8% fixed for five years, and the borrower could prepay without penalty after year three. Read More »
The Mogharebi Group Closes Seniors Housing Sale
A Los Angeles-based private real estate investment group acquired a 284-unit seniors housing community in Wildomar, California, from Craig Thralls, a local developer. The Mogharebi Group represented Mr. Thralls in the transaction. An entity linked to Positive Investments was the buyer. Built in 2000, Wildomar Senior Leisure Community features 178 independent living and 108 assisted living units. It was fully occupied with a number of units reserved for low-income seniors. The sale involved two separate properties on separate parcels of land, each with their own ground leases. The Mogharebi Group worked with multiple government agencies and around several rent restrictions, and managed to... Read More »Schedule a demo
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