The “Post-COVID” Assisted Living M&A Market Takes Shape
It is safe to say the senior care M&A market in 2020 is quite different from that of 2019, in terms of the number of acquisitions closed, the values for senior care properties and perhaps most importantly, the types of properties actually put up for sale. Value-add and distressed communities have so far dominated the market since the onset of COVID-19, as owners of newer, stabilized communities are largely sitting on the sidelines to wait for a seller’s market again. Who knows when that will happen? Assisted living communities have been hit hard across the board, census-wise and with cash flow too. As a result, we have seen the sales of many struggling communities, which brought... Read More »
A Novel Idea: Bonus Payments to Skilled Nursing Facilities
We were heartened to hear that 10,631 nursing facilities will be receiving a total of $333 million from HHS based on improving COVID-19 metrics. While it sounds like a lot, it comes to just over $31,000 per facility. The good news is that this is just the first of five potential payments for good performance. The performance was for just one month, from August to September, whereby these 10,631 facilities had 1,200 fewer COVID- related deaths month over month. Apparently, this is all part of HHS’s goal to use a little more of the carrot and less of the stick when dealing with the nursing home industry. About 77% of the eligible facilities received the funds. It would be... Read More »
Ziegler Finances Spokane CCRC Expansion
Ziegler has been quite busy arranging bond financings for not-for-profit clients, and the team has done it again for two CCRCs in Spokane, Washington. The borrower, Rockwood Retirement Communities (affiliated with Spokane United Methodist Homes), owns and operates Rockwood South Hill and Rockwood at Whitworth, which have a combined 600 residents. The Whitworth community is set to expand its assisted living and memory care offering, with Phase I including the demolition of a portion of The Manor building to be replaced by 48 new assisted living units and 24 new memory care units. Then, in Phase II, ownership will replace the rest of The Manor, the healthcare center, two duplexes and two... Read More »
Recent Senior Care Deals, Week Ending October 30, 2020
The month of October was busier than normal, or at least the post-pandemic normal. Check out our recent senior care M&A deal chart. Long-Term Care AcquirerTargetPrice The Ensign GroupThe Medical Lodge of AmarilloN/A Regional owner/operatorArbor Court & The Willows$2.85 million Not disclosed3 senior living communities$46 million Not disclosedSt John's Manor$1.3... Read More »
Welltower Is First To Report Third Quarter Results
As expected, Welltower reported a 150-basis point decline in occupancy in its 557-community seniors housing operating portfolio (SHOP) to 78.4%. The good news is that this is a much smaller decline compared with the second quarter’s drop of 490 basis points. Through October 23, occupancy declined by another 30 basis points since the end of September, and management expects the full fourth quarter drop to be between 75 and 125 basis points. The slowing decrease is positive, and while they did not forecast 2021 occupancy, as an industry, census has never increased in the first quarter, so even with the slowing trend line, occupancy for this large portfolio is expected... Read More »
The Ensign Group Reports Encouraging Results
The Ensign Group came out with its third quarter earnings, and contrary to many in the industry, the company reported rising revenues, net income and skilled mix. That news, plus the announcement that the company returned another $23 million of relief funds (on top of the previous $109 million announced last quarter), sent shares up by 6.3% to $60.19 per share, which is close to a near-term high of $61.98 per share achieved on October 14. By returning those provider relief funds, and reporting strong operating results, Ensign saw its market cap increase by over $130 million, so it seems like the move may have paid off. Combined same store and transitioning occupancy did decline by 2.4%... Read More »
Walker & Dunlop Refinances Chicagoland Portfolio
A portfolio of four skilled nursing facilities, all located in Illinois within 50 miles of Chicago, secured permanent financing courtesy of Walker & Dunlop. The properties include Aperion Care Plum Grove, a 69-bed SNF in Palatine, Pavilion of Waukegan, a 112-bed facility, Park View Rehab Center, another 112-bed facility in Chicago, and River View Rehab Center, which has 203 beds in Elgin. They received a combined $38.4 million in financing from HUD, with terms that ranged from 30 to 34 years. All also featured low, fixed rates and a declining prepayment schedule. Joshua Rosen led the origination team for Walker & Dunlop. Read More »
Cain Brothers Manages California Bond Issuance
Cain Brothers served as the sole manager in the public issuance of $37.275 million of taxable, fixed-rate revenue bonds. Not-for-profit Los Angeles Jewish Home for the Aging, which programs all levels of senior care from short-term rehab to CCRCs to PACE and in-home care, was the recipient of the financing, which will advance refund the organization’s Series 2014A bonds. Those previous bonds were about two years from the call date, but they featured a higher interest rate, so a refinance in this low-rate environment made sense. The current bonds are insured by Cal-Mortgage. This was actually the third refinance completed for the sponsor in the last eighteen months, giving them more funds... Read More »
Digging Out
Cases of COVID-19 are rising across the country, but providers are better prepared than ever to take care of our elderly. The coronavirus pandemic is spreading, and any notion of a vaccine by the end of the year has faded. Yet, even though we take care of the most vulnerable population, the senior care acquisition market seems to be stabilizing. More deals have been closing this month than in the previous several months. But what does this mean? Third quarter earnings reports start coming tomorrow, and no doubt the occupancy numbers from the REITs will show continued deterioration to new record lows. This is the unfortunate reality we are all dealing with. And as average occupancy goes... Read More »
Senior Care Realty Sells Wisconsin Assisted Living Community
Mark Van Den Broeke of Senior Care Realty led the sale of an assisted living community in the Milwaukee area of Wisconsin with an unconventional history. That is because it was a former convent, but the 60-year old community has been operating as a 24-unit/27-bed assisted living community in South Milwaukee for many years. Built in 1960, it has recently been renovated, and occupancy was hovering around 100%. Operations were also solid, and the community made a profit on mostly government funding. The deal was actually fully negotiated and closed pre-COVID but just now has risen to the surface. The community sold for $1.305 million, or $54,400 per unit, at a 10.5% cap... Read More »Schedule a demo
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