Capital Senior Living Hits 10-Year Low
After the earnings reports over the past four weeks, it was unclear whether the seniors housing sector had hit operational bottom or not. Unfortunately, Capital Senior Living’s share price is still trying to find a bottom. But November 19th’s low of $3.45 per share was also the lowest price in more than 10 years, when in March 2009 it hit a low of $2.36 per share. This is not what new CEO Kim Lody wants to see. It is not what shareholders are expecting to see. In March of 2013, the shares hit a peak of $27.90, and hovered below that for the next few years. Acquisition activity was strong, and some shareholders thought they should sell and not wait to see higher values. Within five years,... Read More »
SNF Providers Are on a PDPM Learning Curve
It’s been less than two months since the new Patient Driven Payment Model (PDPM) was implemented across all SNFs participating in Medicare Part A, and while no one can make definitive conclusions on the results and success of the program yet, some consistent themes have already emerged according to Zimmet Healthcare’s PDPM Reimbursement Analysis for the month of October. In the lead-up to October 1st, the consensus largely was that PDPM would be a windfall to some SNFs, particularly those caring for high-acuity, medically complex patients whose conditions, and the extra work that comes with them, would finally be recognized by CMS, and reimbursed. To them, the change was far better than... Read More »
Berkadia Brings on the Financings
Berkadia announced an impressive array of financings it closed in the past three months, ranging from HUD mortgages, to Fannie Mae/Freddie Mac deals and a couple of bridge loans, all totaling nearly $160 million in volume. The largest deal was a $107.6 million Fannie Mae master credit facility closed for a portfolio of eight senior living communities in South Carolina, Mississippi and Louisiana. Ed Williams and Rafael Nobo (serenaded with Happy Birthday last July on a flight from Chattanooga) secured the 10-year, fixed rate financing, with an interest-only period, on behalf of the portfolio’s Louisiana-based developer, owner and operator to refinance the properties, consolidate debt into... Read More »
NHP Foundation Grows Its Chicago Holdings
The NHP Foundation, a New York-based not-for-profit organization known for preserving and developing affordable housing, just acquired its first Chicago-area senior apartment building, and fourth property overall in the metro area. Built in 1991, the Section 8 community has 57 total units in the Woodlawn neighborhood, near the new Obama library. It sold for $4.933 million, or about $86,500 per unit. To fund the purchase, NHP secured $4.515 million in financing from Low Income Investment Fund and $817,000 of its own equity from NHPF Equity. The $400,000 above the purchase price was for transaction and closing costs, plus HUD-required repairs. Through partnerships with financial... Read More »
Recent Congressional Testimony
Skilled nursing gets hammered, again, in Congressional hearings, but they avoid the biggest problem: lack of funding. So, did you think I was going to talk about the impeachment hearings? No way. That would be too easy. I’m talking about hearings on the cost of caring for the elderly. Of course, a few of the people testifying had very little positive to say of nursing facilities and the quality of care. But what struck me as odd was that there was not one representative of the skilled nursing industry there. You would think that a large chain CEO might have been invited, or perhaps Mark Parkinson of the American Health Care Association. Maybe they were, but I kind of doubt it.... Read More »
SLIB Closes Illinois and Maine Transactions
The deals keep on coming from Senior Living Investment Brokerage. Jeff Binder and Ryan Saul first announced the sale of a supportive living facility in Jacksonville, Illinois on behalf of a regional owner/operator who was looking to retire from the industry. Built in 2004, the community features 86 units, including studio, one-bedroom and two-bedroom options. At the time of marketing, an application was submitted to the state for certification in the SLP Dementia Care Program, which was approved during the closing process, allowing the new owner to add 10 memory care units in a part of the building that was purpose-built for them. Occupancy was 90% at the time of the sale, but there is not... Read More »
Strawberry Fields REIT Invests in Indiana SNF
Strawberry Fields REIT grew its portfolio yet again, with the purchase of a 72-bed skilled nursing facility in Muncie, Indiana (Indianapolis MSA), pushing the REIT’s total SNF holdings to over 70 facilities. Strawberry Fields is no stranger to this property, having been leasing and subletting it from the previous landlord since November 2011. They picked up the property for $3.15 million, or $43,750 per unit, in an all-cash transaction. Built in 1972, the facility was part of an Indiana county hospital UPL tie-up with Henry County Hospital and is being managed by Infinity Healthcare Management. It offers both comprehensive medical and rehabilitative therapy services, in addition to... Read More »
Minnesota Assisted Living Community Gets A New Neighbor
In a deal that was anything but ordinary, Ray Giannini of Marcus & Millichap sold an assisted living community plus an adjacent vacant skilled nursing facility in Owatonna, Minnesota for about $2.95 million, or $59,100 per unit. Steele County previously owned both of the buildings and brought in Benedictine Health System (BHS) to manage them. Built in 2002, the 50-unit AL community was operating decently with a nearly full, all-private pay census and a margin around 15% on $1.5 million of revenues. Since it was county-owned, we imagine there is a lot of room for improvement in controlling expenses. However, at the SNF, BHS had gradually transferred the beds out of the 1970s-era... Read More »
ALP Community Obtains Financing from Monticello
Monticello Asset Management, a specialized private real estate and asset-based lender, asset manager and servicer, just provided $40 million in 10-year, first lien debt for an assisted living community in the Bronx, New York. The 256-bed community participates in the Assisted Living Program, which was introduced in the state around 30 years ago. In short, the ALP program provides a higher level of care (close to skilled nursing) in an assisted living setting for Medicaid residents. It’s a win for the state, which can reimburse nearly skilled nursing level care at a lower rate, and for the providers, which can take in Medicaid residents at a significantly higher rate. Even with the higher... Read More »
Capital Funding Secures Bridge Financing for Illinois Portfolio Acquisition
A portfolio of six skilled nursing facilities located throughout Illinois sold with the help of bridge financing secured by Capital Funding, LLC. Totaling 594 beds, these facilities are operated by Crown Healthcare, a family-owned company that owns and operates skilled nursing and senior living properties across five states, with its primary focus in the Ohio market. The bridge loan, originated by Craig Casagrande, funds 100% of the acquisition costs. In addition, Capital Funding financed the operations of a seventh skilled nursing facility and also provided about $5.5 million in working capital. Ultimately, they expect to refinance the debt through HUD. This deal follows Capital Funding’s... Read More »Schedule a demo
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