Brookdale and Capital Senior Living Earnings Disappoint
We are not sure why investors continue to think there may be some break-through news every quarter when the big seniors housing companies report earnings. This has been, and is going to continue to be, a slog to get through the mess created by too much development exacerbated by labor problems. Brookdale Senior Living’s management put a positive spin on the quarter, such as associate turnover improving by 5% compared with last year, and same-community move-ins showing positive year-over-year growth. That is all good news, but it will not be enough to pacify shareholders who want to see much more to move the valuation needle. And while some categories of occupancy showed improvement, such... Read More »
Milwaukee-Based Operator Buys Struggling Wisconsin Community
After being placed into receivership when its not-for-profit owner failed to make its bond payments, a senior living campus in Racine, Wisconsin just sold to a regional owner/operator with the help of Jason Punzel and Ryan Saul of Senior Living Investment Brokerage. Featuring 74 units of independent living (with limited services) and 40 units of assisted living, the community was built in 1989 near the shore of Lake Michigan. Amid the financial difficulties, occupancy fell to 77% for the IL and just 28% for the AL. After SLIB was hired to solicit offers and led the court-approved sale, a Milwaukee-based operator emerged as the buyer, paying $5.5 million, or $48,250 per unit, at an 8.0% cap... Read More »
CBRE Finances Silverstone/Crescent Acquisition
A joint venture between Silverstone Senior Living and Crescent Real Estate LLC turned to Aron Will, Austin Sacco and Tim Root of CBRE to arrange financing for its acquisition of a 120-unit assisted living/memory care community in Palm Beach Gardens, Florida. Opened in 2017, the property was developed by both an affiliate of Silverstone and an institutional equity partner, which is presumably exiting with this deal. It features some desirable amenities, like a virtual bowling alley, an onsite doctor’s office and an art studio. Harbor Retirement Associates was hired to operate the community and will continue to do so. CBRE funded the deal with a non-recourse loan from a regional bank. The... Read More »
Earnings Announcements Feature Major M&A Moves
The mid-summer M&A doldrums abruptly ended this year with the earnings announcements from the publicly traded REITs. They started with Welltower, which announced its $1.8 billion Benchmark Senior Living portfolio sale (for 48 properties) and several major portfolio acquisitions with existing partners Sunrise Senior Living and Discovery Senior Living and new partners Balfour Senior Living and Clover Management, comprising some 94 properties not including a couple of massive development pipeline agreements with Balfour and Discovery. That was just the start. Other big news was in Omega Healthcare Investors’ Q2 press release, in which the REIT announced that it would spend $735 million... Read More »
Helios Handles California SNF Refinance
Working with a regional bank, Bill Janis and Mario Wilson of Helios Healthcare Advisors structured a 15-year refinance of a 172-bed skilled nursing facility in California. The Golden State-based owner/operator engaged the Helios team to pay off its first mortgage and establish a new line of credit, resulting in the longest possible term and an interest rate fixed at 4.85%. The regional bank was looking to expand its presence in the skilled nursing space, so the deal was a clear win-win. Originally built in 1965 with an addition in 1975, the Los Angeles County facility was well occupied at 98%. It also boasts good clinical and quality of care ratings from the state. Read More »
Contemporary Closes Mezzanine Loan for Cascade Acquisition
The team at Contemporary Healthcare Capital closed a $5 million mezzanine loan to the affiliates of Citadel Care Centers and Cascade Capital Group for their acquisition of four skilled nursing facilities in Florida. The portfolio totals 460 licensed beds and has locations in Fernandina Beach, Haines City, Orange County and North Port. Contemporary closed the loan in conjunction with a senior loan and accounts receivable line provided by SunTrust Bank. The purchase price came to just over $106,000 per bed, and Mike Pardoll of Marcus & Millichap and Mark Myers (formerly with Marcus & Millichap) represented the seller. This announcement comes just a month after Cascade revealed that... Read More »
Blueprint Sells Turnaround Texas Asset
A memory care community in need of a total turnaround just sold in the Turtle Creek neighborhood of Dallas, Texas. Ben Firestone and Joshua Salzman of Blueprint Healthcare Real Estate Advisors represented the seller, a publicly traded REIT whose national operator partner deemed the community to be non-core. The 32-unit community was both too small and too old, in addition to operating with low occupancy and no positive cash flow. It was also in need of significant capital expenditures to allow it to compete in its albeit highly desirable location. Despite operational hurdles throughout the transaction process, the value-add community eventually sold to Iris Senior Living, a growing local... Read More »
Chicago Pacific Founders Flourishes This Summer
Chicago Pacific Founders has been one of the most active buyers of senior living assets this summer, announcing four deals since the start of July. Its most recent acquisition involved an 83-unit assisted living/memory care community in Richardson, Texas. Opened in March 2017, the community quickly reached stabilization, with occupancy currently sitting at 94%. It features a number of amenities, including a bistro lounge, movie theater and outdoor courtyard, in addition to being located near shopping, dining and entertainment centers. Evans Senior Investments represented the seller, another private equity firm, in the transaction. To fund the deal, CPF turned to Aron Will, Austin Sacco and... Read More »
The Great Development Slowdown
Everyone is talking about development slowing down, but over development is just part of the problem. We have been hearing it for a few months: seniors housing development is slowing down, based on fewer new construction starts. We have heard it from NIC MAP, from HCVenTower, and now Brookdale Senior Living. They are all saying that in many of their markets, they are seeing light at the end of the over-development tunnel. Maybe. It is one thing if new starts are declining, but it is quite another to fill the current empty units plus the new supply that is currently opening, and going to open. Let’s just say, we are not out of the woods yet, and census is only one part of the problem. Not... Read More »
Assisted Living Values Continue Rebound
Every quarter, we take a look at the latest 12-month pricing multiples for the assisted living, independent living and skilled nursing markets as an added bonus to the Senior Care Acquisition Reports. Starting with assisted living, the market appears to have rebounded after the drop in value recorded in 2018. From 2018 to the four quarters ending on June 30, 2019, the average price paid per unit rose from $186,400 to $205,900, a 10.5% increase. The jump was smaller when comparing the four quarters ended March 2019, when we recorded an average price of $204,000 per unit. That market, which includes memory care communities, suffered from the woes of overdevelopment, not only affecting... Read More »Schedule a demo
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