Checking in on Chattanooga
Last month we wrote of the sale of a Chattanooga, Tennessee independent living community to a joint venture between Atlas Senior Living and Veritas Senior Living. Now, we can report that Richard Lynn of Marcus & Millichap represented both the buyer and the seller in the transaction, with an assist from Joseph McKibben, who was the broker of record in Tennessee. The community was originally a hotel but converted in 2008 to feature 136 units. It currently is a low-cost provider in the area, with rents ranging from $1,200 to $1,500 per month, but that’s where the buyers see upside. They plan on making some cosmetic renovations as well. Occupancy was around 85% and with a $3.6 million (or... Read More »
Record-Setting M&A Month
Over the last seven years, August has averaged just 25 acquisitions. We are already 50% above that, and still counting. As the dog days of August come to an end, is there anyone still working away before Labor Day? I have to say, the healthcare M&A market has been quite active this summer. In the seniors housing and care market, we are closing in on a record month of activity. As of yesterday, we have tracked 37 acquisitions in August, equal to the 37-deal record set in 2015 for the month. With a few days left to go, I am confident that we will shatter that record. That means that the private market continues to have a lot more confidence in the industry than the public markets. With... Read More »
BMO’s Busy Summer
Shunning any summer doldrums, BMO Harris Bank’s Healthcare Real Estate Finance group announced two loan closings in the last week, on the back of a $200 million facility it closed on behalf of Kayne Anderson Real Estate Advisors and Watermark Retirement Communities earlier this month. First, in Hugo, Minnesota, the group acted as sole lender in arranging an $18 million term loan to refinance a 100-unit senior living community. Keystone Senior, LLC, an owner/operator of communities across seven states, was the borrower. The group then worked on behalf of TH Real Estate (an affiliate of Nuveen, the investment management arm of TIAA) and LCS to fund their acquisition of a large CCRC in Evans,... Read More »
County-Owned Skilled Nursing Facility Gets More Than A Facelift
Usually we hear of counties selling their unprofitable skilled nursing facilities, but not this time. A county in Pennsylvania is building a brand-new facility to replace its existing 80-year old SNF, with the help of a $34 million loan from the USDA. Located in Bellefonte, Pennsylvania, the old facility was originally built in 1938, with additions in the 1970s and 1990s, and was experiencing higher and higher maintenance costs. Owned by Centre County, the facility was also operated by the county until 2013, when a not-for-profit board took over, leasing the property for $1 a year. Since then, the not-for-profit has improved occupancy, with a 75% Medicaid census, and made the facility... Read More »
Behavioral Skilled Nursing Facility Sells In Tucson
A unique skilled nursing facility with a sizable behavioral health census sold in Tucson, Arizona, in a deal handled by Evans Senior Investments. Those behavioral beds proved to be quite the boon to cash flow, with their Medicaid rate nearing $300 per day. Apart from them, the facility had several areas to improve on, including its 71% census, 16% quality mix and operational capacity (just 211 of 240 total licensed beds were functional). Operated by Avalon Health Care Group, the 35-year old facility did have the advantage of being located 500 feet away from a 227-bed hospital. Its independent ownership group elected to sell to reinvest their capital. A Chicago-based owner/operator,... Read More »
Dekel Capital Refinances New Development
As a newly developed assisted living/memory care community in Fresno, California, continues its march towards stabilization, its owners refinanced the existing construction loan with the help of Dekel Capital. The Los Angeles-based real estate merchant bank placed a $14.1 million bridge loan, with a 25-month interest-only term, at approximately 65% loan-to-value to provide funding through the lease-up of the remaining units. Mountain Capital Partners and Willis Development opened the community in 2016 with 83 assisted living and 24 memory care units. Read More »
SunTrust Secures HUD Loan For Lynchburg Senior Living Community
Family-owned senior living operator Runk & Pratt secured a $13.2 million HUD loan to refinance its assisted living community in Lynchburg, Virginia. Thanks to a connection to the owners through David Wilt, market president of SunTrust Corporate & Commercial Banking in Roanoke, Virginia, Joshua Hausfeld of SunTrust CRE Seniors Housing & Healthcare Finance originated the loan, which came with a 35-year term and 35-year amortization schedule. The community was originally built 40 years ago but converted to assisted living in 1996 and now features 57 units and 81 beds, including some for memory care. It also underwent extensive renovations in 1998, 2003 and 2016, and has... Read More »
Monticello Offers Its Services In The Volunteer State
With $10.38 million in financing secured by two of Monticello Asset Management’s investment vehicles, an experienced borrower acquired a 139-bed skilled nursing facility in Tennessee. The target consists of a 50-bed short-term rehabilitation unit in addition to an 81-bed long-term care unit on approximately 10.43 acres. Ancillary services like physical, occupational and speech therapy are also provided at the facility. The borrower, Madison Due West Property, LLC, obtained $8.88 million in first lien debt, while the operating company received a $1.5 million working capital loan. Read More »
Record Sale Price
Brookdale Senior Living has agreed to sell its trophy community in New York City at a record price to Ventas, but will keep the management. Anyone who heard former Brookdale Senior Living CEO Mark Schulte address the ASHA annual meeting in the aftermath of 9/11 will never forget it. He talked about their newest project in lower Manhattan. There was nary a dry eye in the room. The community, called The Hallmark at Battery Park at the time, was still in fill-up, covered in inches of dust and debris, and had to be evacuated. The industry at other communities pulled together, took in as many Brookdale residents as possible, not knowing how long they would stay, not knowing how they would get... Read More »
Going Out On Top
We’ve been saying this since 2014, but it seems to be a good time to sell a seniors housing property. Prices are still near record highs in the assisted living market, at $221,250 per unit in 2017, according to the 23rd Edition of The Senior Care Acquisition Report. The M&A market, even during the normally quiet summer months, is as frothy as ever, with 52 deals announced in the third quarter, so far. But even these reasons aside, a local partnership in Wisconsin is truly exiting the market on top, with its 60-unit assisted living community fully occupied (with a 100% private pay census) and operating at a 31% margin. Built in stages in 2007, 2009 and 2014 in the affluent Green Bay... Read More »Schedule a demo
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