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 »
Regional Owner/Operator Acquires Community with Assumable HUD Debt
Nick Stahler and Chad Mundy of The Knapp-Stahler Group at Marcus & Millichap sold an assisted living/memory care community in a suburb of Salt Lake City, Utah, on behalf of a single-asset owner/operator. The 48-unit/56-bed community was built in 2003 and traded for $4.2 million, or $87,500 per unit. It was 90% occupied, with a modest 19% Medicaid population. The community historically enjoyed a strong private pay case mix and census but recently struggled with compressed profit margins. Ultimately, the buyer, a prominent regional owner/operator, saw significant value in the existing, assumable HUD debt along with immediate expansion plans to not only expand capacity but also increase... Read More »
SLIB Handles REIT Divestment
Vince Viverito and Brad Clousing of Senior Living Investment Brokerage successfully sold a 145-unit seniors housing community in Bountiful, Utah, on behalf of its REIT owner that was looking to exit the state and focus on its core markets. Built in 1978 and 1999, the community features independent living, assisted living and memory care units. Occupancy was 70%, and the community had a significant Medicaid census that impacted operating margin. At the time of marketing, the community was losing nearly $1 million on $3.2 million of revenues, so some expense management could also be in store. There was a good amount of agency labor that could theoretically burn off in the near-term, which... Read More »
MidCap Financial Funds Illinois Refinance
MidCap Financial, a commercial finance company focused on middle market transactions, closed a first mortgage loan with affiliates of Harrison Street and Banner Real Estate Group. The floating-rate loan refinanced the original construction loan on a Class-A, 240-unit independent living community located in Deerfield, Illinois. Wells Fargo provided the original construction debt. The community has steadily leased up since opening in 2020 and benefits from its affiliation with CJE SeniorLife. The transaction was arranged by Sarah Anderson of Newmark. Read More »
Ventas To Take Over Santerre Health Portfolio
When it rains, it pours, and that has certainly been the case for the seniors housing industry’s debt issues in recent weeks. Right at the end of the first quarter, Ventas announced that it intends to take ownership of the collateral that supports its approximately $486 million cash-pay mezzanine loan to Santerre Health Investors, a company that was formed to manage the portfolio of DigitalBridge’s healthcare assets that sold to an investment group composed of Highgate Capital Investments and Aurora Health Network in 2021. Ventas had originally provided the loan as part of a refinance in 2019 with Colony Capital, which rebranded as DigitalBridge in 2021. The $490 million loan bore interest... Read More »
VIUM Capital and Merchants Bank Close $1.1 Billion Synthetic Securitization
VIUM Capital and its joint venture partner Merchants Bancorp, the parent company of Merchants Bank of Indiana, completed a synthetic securitization referencing over $1.1 billion of first-lien, floating-rate bridge loans on skilled nursing and seniors housing properties. ATLAS SP Partners acted as structuring agent and sole bookrunner on the transaction. As part of the deal, Merchants Bank issued and sold $158 million aggregate principal balance of senior credit linked notes representing approximately 14% of the reference pool. The bank’s wholly owned subsidiary, Merchants Capital Corp., will continue to service the loans. The transaction involved multiple institutional buyers and did not... Read More »
SLIB Sells Performing Senior Living Community
Six years after it last traded hands, a stabilized senior living community in Sedalia, Missouri, sold to an owner/operator with the help of Jeff Binder of Senior Living Investment Brokerage. Located about 90 miles southeast of Kansas City, the community was built in stages in 2007, 2010 and 2015, and now features 129 units of independent living and assisted living, including some high-acuity AL units. In 2017, it was divested by a regional operator to a Texas-based private investment group for $15 million, or $116,300 per unit, and at an 8.0% cap rate. SLIB worked on that deal, as well. At the time, occupancy was above 95%, and the community was operating at a... Read More »
Mounting Troubles For Sonida Senior Living
When we read Sonida Senior Living’s recent fourth quarter earnings report, we had already heard that it contained the dreaded “going concern” caveat. While not surprising, what was surprising was how glowing the highlights were. Management “was thrilled with what our team has accomplished in Q4 and throughout 2022,” but five pages later it is disclosed that the company may run out of cash and fail to meet its obligations. Hmmm. Investors sent the share price tumbling by 40%. We were not surprised because in our November 2022 issue we stated that we thought the company would run out of money by April of this year based on its cash burn rate. We are now at the end of March, and cash... Read More »Schedule a demo
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