Negative Operating Margins for SNFs?
Always be careful about terminology in health care, and make sure you understand what things mean, like operating margin. It is always important to understand the definitions of certain terms, especially when it comes to health care. There has been a lot of news lately about how the median “operating margin” for skilled nursing facilities nationally has now sunk below zero. I have to admit, this drives me crazy. The implication is that for the median nursing facility, it is operating at a breakeven level….from operations. Operations are usually defined as labor, food, maintenance, utilities, basically everything that is needed to “operate” the facility. As I said last week, if half... Read More »
Two More Tennessee Transactions From SLIB
After acquiring two skilled nursing facilities in Tennessee as part of a larger portfolio deal, a regional real estate owner, who focuses more on the CCRC market, decided to divest the properties with the help of Ryan Saul, Daniel Geraghty and Brad Clousing of Senior Living Investment Brokerage. Located about 60 miles southwest of Nashville, the Mount Pleasant facility has 72 skilled nursing beds and 30 independent living units. Built in 1980 with additions in 1982 and 1996, it was 85% occupied and was losing about $200,000 annually. Originally built in 1967 with a renovation in 1988, the Lenoir City facility (Knoxville MSA) features 104 beds with a vacant 16-unit assisted living portion... Read More »
Ensign Expands in North Texas
The Ensign Group grew its skilled nursing portfolio by five facilities in two separate transactions, bringing its total holdings to 213 skilled nursing properties in 13 states. The larger transaction consisted of the operations of four facilities in North Texas that will be subject to long-term, triple-net leases and purchase options following year-five of the lease. Included in the purchase was a facility in Wills Point with 112 skilled nursing and 72 assisted living beds, a 190-bed SNF in Rockwall, a 150-bed facility in Rowlett and a 126-bed facility in Waxahachie. The properties will complement Ensign’s other operations in the Dallas market. Keystone Care LLC, Ensign’s Texas-based... Read More »
Reis Helps California Assisted Living Owner Exit the Business
Rob Reis of Marcus & Millichap recently sold a 45-unit assisted living community in Modesto, California, representing the single-asset owner/operator who was looking to exit the business. The seller developed the property in the 1980s, and has operated it ever since. Occupancy was 84%, and it was bringing in nearly $385,000 in NOI on approximately $1.5 million of revenues, for a 25% margin. Not bad for an older building, but it could still be improved. The buyer was Senior Living West, a growing investor/asset manager in seniors housing, which purchased the community utilizing a regional management organization, Cimino Care. They clearly didn’t want to waste any time starting, as the... Read More »
Dwight Capital Refinances Large New Jersey SNF
A skilled nursing facility in Cherry Hill, New Jersey (Philadelphia MSA) with a wide variety of service offerings, just refinanced through HUD with the help of Dwight Capital. Built in phases from 1986 to 2002, it now totals 246 beds with five distinct units, including a 40-unit behavioral management unit, a 20-bed ventilator care unit, a substance abuse facility and a dialysis unit, in addition to providing short- and long-term rehabilitation and nursing care. Its clinical specialties also comprise physical, occupational, speech and IV therapies, wound care, pain management, tracheostomy care, dementia care, cardiac care, a pulmonary specialty and hospice care. In addition, there are... Read More »
Cornerstone Healthcare Files For Bankruptcy Protection
Cornerstone Healthcare, an operator of skilled nursing facilities in the Pacific Northwest, filed for Chapter 11 bankruptcy protection. The CEO, Will Masterson, announced the reorganization in a statement filed with the U.S. Bankruptcy Court Western District of Washington that listed lender and lessor issues as the reason for it. Operations across the portfolio weren’t great leading up to the bankruptcy, but they certainly could have been worse. The portfolio includes 14 SNFs and one assisted living community in Washington, Oregon and Idaho, with total capacity of 1,508 beds. Occupancy was 78% based on that capacity. In the year to date through September 2019, the company generated more... Read More »
Recent Senior Care M&A Deals, Week Ending November 29, 2019
Check out our recent senior care M&A deals! Long-Term Care AcquirerTargetPrice Real estate investment companyMacArthur Hills & Prestonwood Court N/A Regional owner/operatorWyndmoor Hills N/A Sabra Health Care REIT/Cadence LivingSunshine... Read More »
Distressed CCRC Sells Near Philadelphia
A distressed rental CCRC in a Philadelphia suburb just (hopefully) secured a brighter future, changing hands to a new regional owner. Steve Thomes, Michael Segal and Dan Mahoney of Blueprint Healthcare Real Estate Advisors handled the sale on behalf of a court-appointed receiver. Sitting on a 12-acre campus in an affluent area, the community features 180 units. But that ideal location did not prevent the community from struggling operationally. However, once the receiver took full control, things started to improve. The buyer, which has both a local and regional presence, also has a strong capex plan currently being implemented that should help with the turnaround. We imagine that even... Read More »
Cushman & Wakefield Handles Dallas Sale
Richard Swartz, Jay Wagner, Jim Dooley and Chris Remeika of Cushman & Wakefield Senior Housing Capital Markets led the sale of two senior living communities in Irving and Plano, Texas (Dallas MSA), to a real estate investment company. No purchase price was disclosed. Totaling 265 units of independent living, assisted living and memory care, these communities feature plenty of amenities, include restaurant-style dining, bistros, covered patios, indoor pools, fitness centers, libraries, media rooms and game rooms. The Irving community was recently opened, but the Plano property, which offers just AL and MC, has been stabilized for the last 10 years. Going forward, subsidiaries of Senior... Read More »
Helios Refinances Struggling SNF
Unfortunately, we have seen this situation all-too often when a skilled nursing facility faces too much turnover among its senior administrative staff combined with increasing pressures from ACOs (Accountable Care Organizations), leading to operational underperformance. In those ACOs, even though they are often the low-cost care provider for post-acute patients, SNFs often feel the most reimbursement pressure, and they feel it in their operating margins. One regional operator with a 99-bed skilled nursing facility in San Bernardino County was facing these challenges plus the looming maturity of its first mortgage. So, they turned to Bill Janis and Mario Wilson of Helios Healthcare Capital... Read More »Schedule a demo
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