Carnegie Capital Finances Oregon Assisted Living Acquisition
A portfolio of four assisted living communities in rural Oregon found a new owner with the help of debt arranged by JD Stettin of Carnegie Capital, the seventh transaction closed by Mr. Stettin during the pandemic. Totaling 136 units, the portfolio is being converted to include memory care, and will feature a mix of 60 AL and 85 MC units across the four communities. Occupancy could be improved, but the current residents will not be displaced as a result of the project. The portfolio was owned by a large national senior care provider with facilities in over 25 states. But that turnaround opportunity attracted a new owner, a private fund based in Oregon and Arizona that is highly motivated... Read More »
Seniors Housing M&A Market Comes to Life
Welltower’s recent announcement of two portfolio sales at low cap rates during the pandemic bodes well for the market. It has been a quiet past few weeks in the seniors housing M&A market. Last week was the first time we can remember when we have gone an entire week without one announced acquisition. That leaves us worried as to the liquidity in the market and what we may expect in the coming weeks. Well, we breathed a sigh of relief when Welltower announced two separate transactions for seniors housing portfolios completed by Newmark Knight Frank with a total value close to $800 million. When the MOBs are added in, the total comes to about $1.3 billion. More details on these... Read More »
Newmark Knight Frank Handles Welltower’s $1.3 Billion Sale
There were rumors circulating last month of a major portfolio sale by one of the healthcare REITs, and given the dearth of deals in May, we clung on to the promise of it. Well, on June 1, Welltower announced not one, but two large seniors housing portfolio dispositions, along with a major medical office building sale, all combined for a roughly $1.3 billion purchase price. Ryan Maconachy and Chad Lavender of Newmark Knight Frank handled the transactions, bringing one of them from NDA to closing in just 45 days, including securing agency financing to fund it. To close any deal these days is exceedingly difficult, not only one of this scale, so well done to the Newmark team. It certainly... Read More »
Two REITs Provide COVID and Census Updates
Welltower recently disclosed what has been happening at its large seniors housing operating portfolio (SHOP), and we again give them credit for being transparent with investors as to the operating performance of its customers. In the second quarter through May 29, its SHOP portfolio has seen occupancy decline by 420 basis points. That’s the bad news. The good news is that the weekly declines of 50 and 60 basis points in April have been cut in half to 20- and 30-basis point weekly declines in the latter half of May, ending with a 20-basis point drop the last week of the month. That still implies an 80-basis drop for a month, which would be terrible in normal times, but it is all... Read More »
May’s M&A Meltdown
The M&A statistics are in for May, and it was a doozy. Only 19 seniors housing and skilled nursing deals were publicly announced during the month, nearly half of which coming from the first quarter earnings reports of several public companies. Without those, we would have barely made it to double digits. You have to go back to July 2017 for such a low monthly total, when 16 sales were disclosed. Back then, however, the month was followed by a strong August (27 deals) and September (35). We’re not as hopeful for such a comeback this time. Another facet of May’s M&A activity was that nearly all of the deals were either closed in the first quarter or were all-but-completed... Read More »
Blueprint Closes Another LTC Properties Sale
After representing LTC Properties in its five-phase sale of a 2,500-bed skilled nursing portfolio, Blueprint Healthcare Real Estate Advisors went back to the well, handling LTC Properties and Senior Lifestyle Corp.’s sale of two large seniors housing campuses in Arizona. The deal closed on April 21, with Humair Sabir, Amy Sitzman and Jacob Gehl leading the way. One campus is located in Peoria (northeast of Phoenix) and features approximately 430 units in a prime location near regional medical centers. The other campus is in Yuma and totals about 150 assisted living and memory care units. Both properties could use some capital improvements, offering an opportunity to add value to the... Read More »
Diversified Healthcare Trust Raises Expensive Debt, Ventas Makes Cuts
Diversified Healthcare Trust Raises Debt Diversified Healthcare Trust tapped the debt markets with a $1.0 billion, five-year senior note offering with a yield of 9.75%. That puts the spread over the 5-year Treasury at about 940 basis points. That has to be the widest spread by a healthcare REIT we have seen in years, if not a decade or two. Proceeds will be used to repay a $250 million term loan expiring in June, as well as to pay down certain amounts outstanding under its unsecured revolving credit facility. While the REIT certainly has some credit risk, and it did cut its dividend to just $0.01 per quarter to save $33.3 million each quarter, this still seems to be very expensive... Read More »
Carnegie Capital Announces Latest Closings
JD Stettin of Carnegie Capital has certainly had his hands full recently, having closed a couple of refinances in the Pacific Northwest, no easy task in the early days of COVID-19, we’re sure. Mr. Stettin first sourced and structured a cash-out refinance of a 60-unit memory care community near Eugene, Oregon. Featuring a roughly 50-50 mix of Medicaid and private pay residents, the community was between 15 and 20 years old and was owned by a regional operator. Structured at a 75% loan-to-value (putting the community’s value at just under $9.9 million, or $165,000 per unit), the loan came with a 5.55% interest rate for a three-year term. A national bank held the senior note, while a... Read More »
PGIM Refinances Tennessee Senior Living Community
PGIM Real Estate announced its latest transaction, with Executive Director Chris Fenton leading the way. It involved a $10.6 million HUD refinance of a senior living community in Ashland City, Tennessee. Built in 2015 with 100 beds in 80 units, the community provides assisted living and memory care services in a four-story building. Thunderhawk Management & Consulting is the operator and currently runs the property at 90% occupancy. There is also an on-site wellness center that hosts rehabilitation services and therapists. The $10.6 million loan took out previous HUD debt and comes with a 35-year term. Read More »
Greystone Arranges HUD Construction Debt
Working through HUD, Lisa Fischman of Greystone facilitated construction financing for an assisted living community to expand its Buffalo, New York-area campus. Originally built in 2003 with 110 beds in 84 units, the community is located on a 20-acre campus. Onsite amenities including a theater, physician’s office and beauty salon certainly helped attract residents, and the community consistently boasted a waiting list. With that full occupancy, ownership decided to embark on an expansion that would feature 32 new assisted living units and 23,000 total square feet, including the expansion of the campus’ existing communal spaces, all at a cost of approximately $7.5 million, or $234,400... Read More »Schedule a demo
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