McFarlin Group Raises Fund For Distressed Debt Deals
One result of the pandemic that we are sure of will be a rise in the number of sales for distressed assets in the next couple of years. Many communities that were already struggling before COVID-19, because of overbuilding, increased labor costs and other factors, will certainly have difficulty generating the cash flow necessary to service their debt or lease obligations, especially if the occupancy recovery is as slow as some at the NIC Conference are estimating. One company, McFarlin Group, has already announced that they will be committing $100 million to the purchase of distressed loans for seniors housing communities and has so far closed on two deals. McFarlin Group, which was... Read More »
SLIB Closes Columbia, South Carolina Transaction
Bradley Clousing and Jason Punzel of Senior Living Investment Brokerage handled the sale of a senior living community in Columbia, South Carolina. Its private partnership owner was looking to exit the sector, which prompted the transaction. Originally built in 1996, this community was extensively renovated in 2006, 2013 and finally 2016, the last of which saw $2 million invested. It now features 38 independent living, 32 assisted living and 22 memory care units, with a full range of amenities and an attractive physical plant. There are seven buildings on the 6.86-acre site. Occupancy was just 66%, while the community operated at an 8% margin on nearly $2.1 million of... Read More »
Blueprint Sells SNF Portfolio in Receivership
After already serving as interim manager of a portfolio of four skilled nursing facilities in receivership, an East Coast-based skilled nursing operator found a capital partner to acquire the portfolio. Steve Thomes, Chris Hyldahl and Gideon Orion of Blueprint Healthcare Real Estate Advisors were engaged by the Massachusetts-based court-appointed receiver to handle the sales process. All built between 1967 and 1975, these facilities total 572 beds and are located throughout eastern Massachusetts. Following a slight rebound in operations when the current operator stepped into its role in mid-2019, COVID-19 negatively impacted operations across the portfolio (no surprise there given the... Read More »
Evans Senior Investments Announces Two Deals
Evans Senior Investments kicked off the fourth quarter with a couple of deals involving seniors housing properties. The first involved a 154-unit campus in Cottage Grove, Wisconsin that has grown over the last 15 years to include 60 independent living, 70 assisted living and 24 memory care units. It initially opened in 2006 with the AL community, then added the memory care in 2016 and finally the independent living community in January 2018. Occupancy exceeded 93% across the campus for the past few years, and even higher at the brand-new IL portion. Revenues and EBITDAR consistently hovered over $6 million and $2.2 million on an annualized basis, respectively, although we imagine there... Read More »
Helios Handles Houston-Area Portfolio Deal
A skilled nursing portfolio located around the Houston, Texas metro area with some operational and financial struggles found a new owner and operator with the help of the team at Helios Healthcare Advisors. Totaling 390 beds, these facilities were built in the last 10 years by the seller, a regional developer. However, newer vintage is no guarantee for successful operations, and the regional operator that leased the facilities faced difficulty maintaining high census and a good quality mix. There were also some clinical issues that further depressed referrals. These problems resulted in negative lease coverage and cash flow at the time of the sale. So, Helios sourced a real estate... Read More »
Wishing Tom Well(tower)
An unexpected announcement by Welltower that CEO Tom DeRosa stepped down with COO Shankh Mitra named as his replacement. I was not the only one surprised by Welltower’s announcement that CEO Tom DeRosa was stepping down effective immediately. My cell phone was buzzing Monday night with questions, mostly centered around why. Whatever the reason, we wish him well. No one was surprised, however, that COO, Vice Chair and Chief Investment Officer Shankh Mitra has been named as CEO, but will retain his CIO role. He has been spearheading the REIT’s portfolio realignment the past two years, a process that has given Welltower $2.2 billion of cash on its balance sheet and a revolver with $3.0... Read More »
CBRE Handles Sarasota-Area Sale and Financing
It was all hands on deck at CBRE for the sale of an Englewood, Florida (Sarasota MSA) senior living community. We wrote about the deal earlier this week when Chicago Pacific Founders (CPF) announced its acquisition of the property. Featuring 118 units of assisted living and memory care, this community opened in 2017. It is located just minutes from the water and a number of shopping centers and medical facilities. There is also an adjacent 50-acre plot that CPF also acquired to add independent living units and cottages. After leasing up at a rate of approximately six move-ins per month until stabilizing in 2019, the community was 93% occupied at the time of closing. Grace Management will... Read More »
Sinai Residences of Boca Raton Embarks on IL Expansion
Sinai Residences of Boca Raton, a 366-bed/unit CCRC in southeast Florida managed by Life Care Services, obtained a large bond financing to fund an independent living expansion that will grow its IL offering by nearly 50%. Just four years ago, the community opened with 234 independent living units, 48 assisted living units, 24 memory care units and a 60-bed skilled nursing facility, all at a cost of $265 million, or nearly $725,000 per unit/bed. Upon the ribbon cutting, all of the IL residences were already sold, and about $90 million of entrance fee principal redemption bonds helped fund the project in addition to another $124 million fixed-rate bond financing, both arranged by HJ Sims.... Read More »
Lancaster Pollard Charges Into Chambersburg
Lancaster Pollard, a division of ORIX Real Estate Capital, recently refinanced a senior living community in Chambersburg, Pennsylvania. Providence Place Senior Living, a family-owned operator that is headquartered in Hershey, Pennsylvania, owns the 17-acre campus, which features a mix of independent living, assisted living and memory care units. Monthly rates start at $3,082 for independent living, $4,122 for assisted living and $4,411 for memory care. It is located three miles from the Chambersburg Hospital. Miles Kingston, Doug Harper and Casey Moore of Lancaster Pollard secured an $11.5 million loan through its Fannie Mae Seniors Housing program. The loan came with a long term and... Read More »
Welltower Continues To Divest
For news on Welltower’s leadership change, please watch “60 Seconds with Steve” above. The REIT did this week finally disclosed (what we broke last week) its $702 million sale of 11 senior living properties in California, Washington and Nevada to a joint venture between AEW Capital Management and Merrill Gardens, which has been operating the portfolio for Welltower. We reported that the cap rate of pre-COVID cash flow was about 5% based on trailing-12 months ended March 31, 2020. But with the occupancy decline in the past six months, August’s cash flow annualized had dropped to about $25.3 million, producing a cap rate based on that annualized number of 3.6%. The... Read More »Schedule a demo
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