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 »
Genesis HealthCare’s Shares Double in Value
Leading up to Genesis HealthCare’s first quarter earnings release and conference call, the company’s share price took off. The rise started on May 22 when it jumped by 22% on high volume, but then it added another 35% on volume that was 10 times the average. In the course of four days, the price more than doubled, from $0.63 per share to $1.37 before settling down. Subsequent to the earnings report, the price has dropped by 17% and is back below $1.00 per share. So, what were investors expecting from the first quarter, and more importantly, for the results in the weeks after the quarter ended? We’re not sure, because all things considered, it was a “decent” quarter, and operations and... Read More »
Looking for Answers in the Lending Market: A Q&A with Alec Blanc of Monarch Advisors
To get a sense of what is going on in the capital markets in this immediate post-COVID-19 world, we turned to Alec Blanc of Monarch Advisors for his own thoughts. How has the lending environment changed from the beginning of the second quarter to now? Overall, there is less debt capital available than there was prior to the COVID-19 crisis. Many lenders have paused any lending activity in the sector. Notably, most of the mortgage bank bridge lending programs are on hold right now. Most of the remaining lenders have tightened their criteria for new client acquisition, leverage, and underwriting. We are also seeing some widening of credit spreads, probably in the neighborhood of 50 to... Read More »
Monticello Announces Another Portfolio Refinance
A large owner/operator of skilled nursing facilities just refinanced two of its facilities and acquired a third with the help of MONTICELLOAM, LLC (Monticello). Averaging nearly 50 years in age, the portfolio totals 312 beds in North Carolina and Kentucky. The acquired facility joins a portfolio of 8,752 total licensed beds, grown significantly in the last few years with financing provided by Monticello. This transaction featured $30 million in first lien debt with a 36-month term. The deal is similar to another that Monticello closed earlier this month that involved first lien debt provided to an experienced owner/operator for the acquisition of a couple of senior care... Read More »
Leo Brown Group Breaks Ground on Ohio Development
Seniors housing construction is still alive these days, as evidenced by the press releases we continue to get of projects breaking ground or even opening for business. We’re sure lease-up projections have changed, and a lot more developments were put on pause. We wonder if any design changes have been or will be implemented to account for potentially months (maybe years) of social distancing practices too. But we’re glad to see the activity. Leo Brown Group was one firm to announce the ground breaking of a new seniors housing development in Lebanon, Ohio (Cincinnati MSA). Featuring 146 units of independent living, assisted living and memory care, the community is located... Read More »Schedule a demo
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