Capital Senior Living Misses the Mark, Again
As we were watching the share price of Capital Senior Living drop for several days in a row before announcing their fourth quarter earnings results, we were wondering whether something had leaked out, or whether it was the usual sell off because the company had underperformed relative to expectations for too many quarters in a row. We may never know which it was, and maybe a bit of both, but underperformance was there again. Now, we can’t shoot the messenger because Kim Lody took over as CEO at the beginning of this year and was just a Board member before that, but the results were probably worse than anyone expected. Sequential occupancy declined by a whopping 110 basis points from the... Read More »
Cushman & Wakefield Assists in Assisted Living Disposition
As part of a larger effort to exit several non-core assets, an institutional owner decided to sell its 112-unit assisted living/memory care in Mount Vernon, Illinois (about 80 miles southeast of St. Louis), with the help of the Richard Swartz, Jay Wagner, Jim Dooley and Sam Dylag of Cushman & Wakefield. Built in phases from 2001 to 2009 and substantially renovated in 2017, the community struggled against newer competitors in the area and their rent discounting tactics. As a result, occupancy fell to just 60% in 2018. Compass Senior Living stepped in to acquire the asset for $6 million, or $53,600 per unit, leaving plenty of wiggle room for an operational turnaround. From the sound of... Read More »
Hats Off to Capital Funding
About three years after it acquired a 140-bed skilled nursing facility in Hatboro, Pennsylvania, Vita Healthcare Group decided to refinance the property with a HUD loan provided by Capital Funding. Craig Casagrande originated the $16.1 million mortgage, which takes out the original $13.36 million bridge loan and $1.5 million working capital loan provided by the firm to support the 2016 acquisition. That original financing included a turnaround component that increased the loan amount based on projected improvements to the facility’s performance. So, assuming a roughly 90% loan-to-cost, the 2016 purchase price can be estimated just below $15 million, or $106,100 per bed. In early 2016, the... Read More »
CBRE Refinances Nebraska Senior Living Community
Aron Will and Austin Sacco of CBRE National Senior Housing arranged a Fannie Mae refinance of an Omaha, Nebraska senior living community. Owned by a joint venture between Hegg Companies, a Sioux Falls, South Dakota-based real estate investment firm, and Paradigm Senior Living, an operator with an extensive portfolio west of the Mississippi, the community features 91 units of assisted living and memory care. In addition to boasting large unit sizes and abundant amenities, it is also located less than five miles from the only full-service hospital in West Omaha, CHI Health Lakeside. To refinance the property, Messrs. Will and Sacco originated an $11.9 million loan, with a fixed interest... Read More »
Non-Stabilized SNFs Drop in Value
We are fast approaching the publishing of our Senior Care Acquisition Reports, which we’ve split for the first time into the Skilled Nursing Acquisition and Investment Report and the Seniors Housing Acquisition and Investment Report. You can expect these Reports to hit your desk sometime in the next few weeks, if you order them, of course. In them, we’ve included more graphs, stats and analysis than ever before, along with comprehensive lists of the industry’s operators, private equity firms, REITs, lenders and brokers. Here is a taste of what you’d find: Source: The 2019 Skilled Nursing Acquisition and Investment Report Traditionally, we have defined stabilized occupancy for skilled... Read More »
Thoughts On NIC Conference
New programming was just what the industry needed. Fresh from three days in San Diego attending the NIC “Spring” Conference, there were some noticeable changes, other than many new faces again. At past conferences, most of the sessions had to do with real estate, valuations, operations, competition and financing alternatives. While all important, this was the first NIC where there was an unusual amount of attention to things that most people either don’t want to hear about, or just plain don’t understand. I am speaking of Medicaid managed care, in both skilled nursing and assisted living, Medicare Advantage plans in assisted living, I-SNPs and value-based care, and, of course, the new PDPM... Read More »
Maryland Acquisition Update
We previously reported on the sale of two skilled nursing facilities in Maryland, but had few details. Now we do. Both facilities are located in Baltimore and have a total of 307 beds, one with 225 beds with a 16-bed ventilator care unit which was built in 1990 and 1996, and the other with 82 beds, which was built in 2004. All things considered, these can be considered to be fairly new. The seller, Brinton Woods Management Company, did a very good job operating these facilities, which had a four-star and five-star CMS rating. In addition, overall occupancy was 92.5%, and they operated with a 13.4% margin in 2018, not too bad in today’s environment. Actually, quite good. Revenues in 2018... Read More »
CREATIVCAP Closes First Loan
Scott Kavel of Greystone fame has set up his own lending shop at CREATIVCAP, and less than two months since forming the business, he has already closed his first transaction. On behalf of Vista Pointe, an Oregon-based senior living operator, Mr. Kavel arranged $8 million in financing from a life company that featured a seven-year term and an all-in fixed interest rate under 5%. With the financing, Vista Pointe will be able to enter the Washington State market with a to-be-built, 56-unit senior living community, expected to open in early 2020. CREATIVCAP’s correspondent, GG Finance, also made a small equity investment in the project, adding to its portfolio of equity and mezzanine... Read More »
New Team at Newmark
Fresh off a banner year that included over $2.5 billion of closed transactions (including well over $1 billion in December closings alone), the HFF seniors housing and healthcare team that includes Ryan Maconachy, Chad Lavender, David Fasano, Ross Sanders and Sarah Anderson has moved over to Newmark Knight Frank. For Newmark, they get a team that has closed over $42 billion in healthcare and senior care investment sales, plus the more than $7 billion in financing that Ms. Anderson has arranged over the years. There is no reason to think the team can’t continue that impressive haul now they are at Newmark. It’s quite the get for Newmark, we have to say. Read More »
Recent Senior Care Deals, Week Ending February 22, 2019
Check out our recent senior care M&A deals! Long-Term Care AcquirerTargetPrice The Hallmark Companies, Inc.Highland Court Senior Residences$9.6 million Strawberry Fields REIT LLC3 skilled nursing facilities$21 million CALCAP Real Estate AdvisorsHawthorn Court at... Read More »Schedule a demo
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