Welltower Obtains Cheap Capital
There has been a lot of noise over the past year about the debt markets being “closed,” or partially so, spreads widening, terms tightening and lenders not wanting to venture into loans with new borrowers. And, we have to mention, Treasury rates have risen significantly, with the 10-year rate actually tripling from its low in 2020. With that as background, we were glad to see that Welltower was able to sell $750 million in unsecured 10-year notes at an interest rate of 2.8%. That represents a spread of just 120 basis points over the 10-year Treasury rate. If not a record, that is close to a record low spread for a healthcare REIT raising funds on an unsecured basis. And it... Read More »
Hollywood, Florida Acquisition Sees Multiple Sources of Financing
IDB Bank and Contemporary Healthcare Capital collaborated on a financing package to support the acquisition of an assisted living community in Hollywood, Florida. Built in the early 1960s and renovated in 2016, this community boasted an average occupancy of 96.5% in the last 12 months, an impressive feat to say the least. It features 105 beds in 57 units and is being purchased by an assisted living owner/operator looking to grow its presence in Broward County. They already own one community in Hollywood and provide third-party operations for another local community for 428 Healthcare Management. To fund the deal and some immediate repairs, IDB first placed a... Read More »
Meridian Makes It Happen Down South
Meridan Capital Group’s seniors housing and healthcare team secured a recapitalization refinance for an eight-property seniors housing portfolio in the Southeast. Located in South Carolina, Tennessee and Kentucky, the communities comprise 296 independent living units, 172 assisted living units and 79 memory care units for a total of 547 units. The names of the properties and total amount of the financing were not disclosed. Dominion Senior Living developed and operated them but will stay on as operator for the new owner, Harrison Street. Meridian’s Ari Adlerstein, Ari Dobkin, Josh Simpson, Matt Lesnik and David Gottlieb negotiated the... Read More »
Recent Senior Care M&A Deals, Week Ending March 26, 2021
Dealmaking is still on the slow side for senior care, but here is our most recent M&A deal chart. Long-Term Care AcquirerTargetPrice Pacifica CompaniesKenmore Senior Living$4.5 million The Pointe GroupHarborChase of Naples & HarborChase of Venice$26.8 million CareCore Mary Scott Nursing CenterN/A Cedar CommunitiesMulberry Grove Senior... Read More »
Bifurcation Between Stabilized and Non-Stabilized SNFs Grew in 2020
In some ways, the pandemic only rubbed salt in the wound in terms of occupancy across skilled nursing facilities nationwide. Average census across the skilled nursing industry was already languishing between the mid- to low- 80% range before the pandemic temporarily shut the doors to many facilities, paused elective surgeries and sent more post-acute patients home to recover. These problems adversely affected the older, mostly-Medicaid facilities and were only made worse in 2020. That means digging out from the pandemic will be a tougher assignment, and buyers paid accordingly in 2020, averaging $55,300 per bed for non-stabilized facilities reporting occupancy lower... Read More »
Carnegie Capital Finances Oklahoma SNF Portfolio Acquisition
A skilled nursing portfolio sold in Oklahoma thanks in part to acquisition financing secured by JD Stettin of Carnegie Capital. Totaling 430 beds, these facilities are located in southern Oklahoma in Marshall, Bryan and Love counties. They were operating well, but there is some upside in operations and census. The existing operator executed a purchase option to take over the portfolio at a price of $13.5 million, or $31,400 per bed. Mr. Stettin secured both a first mortgage and mezzanine financing, with a blended rate of 7.3%, to fund the deal. The senior debt came with an interest rate of 5.75% over LIBOR with a 1.00% floor, while the mezzanine debt had a rate of 15.00% over... Read More »
Three Seniors Housing Properties in Michigan Up for Auction
You may have noticed an ad on these pages in recent weeks for the auction of three seniors housing communities in Michigan, including one turnkey operation and two recently shuttered communities. Well, Tranzon Asset Advisors is running the process on its open competitive bidding platform with the auctions set to conclude between April 20 and April 22. These three assets are part of a larger portfolio of Michigan properties that was recently acquired. However, the pandemic led the developer/owner to focus on specific markets and buildings where they had already developed significant expansion and renovation plans. One community is currently operating in the town of... Read More »
JLL Finances Santa Rosa Development
The JLL Capital Markets team led by Director Bercut Smith secured construction financing for a 92-unit seniors housing development in Santa Rosa, California. A joint venture between Blue Mountain Enterprises and Calson Management is responsible for the project, which will feature 66 assisted living units (comprising studio, one- and two-bedroom options) and 26 private memory care units. The memory care units will contain separate dining and gathering areas, with a large, landscaped courtyard being the connector in the center of the building. Other community amenities include activity areas, rooftop garden, café, movie theater, library and... Read More »
Skilled Nursing Needs A Break
With pressure from the media, the public and government agencies, the skilled nursing industry will be losing some of its best people. Not the time for that to happen. A good friend of mine sent me an article about a New York nursing home administrator who is angry at the fact that nursing homes have been villainized and scapegoated, especially in New York. Where were the car parades in front of nursing homes, like they were in front of hospitals, thanking them for caring for the frail elderly, he asks, and risking their lives as well? Nonexistent, sadly. He couldn’t take it anymore, and moved to Michigan, where he is happily working as an administrator after 20 years in New York. He has... Read More »
Sabra Acquires Two Seniors Housing Communities
In the March issue of The SeniorCare Investor, we wondered when REITs would become net-buyers in the senior care M&A market, after several years of massive divestments. There are clearly some good deals available out there for value-add properties, and if there has been any softening in prices, those bargains may extend to stabilized communities too. Sabra Health Care REIT announced in its fourth quarter earnings call that it plans on spending approximately $1.5 billion on acquisition opportunities, with the majority allocated to be seniors housing assets. A couple of transactions have now trickled out, and sure enough, both involved seniors housing properties selling... Read More »Schedule a demo
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