Surviving The Coronavirus
What a difference five days, and 3,200 miles can make, not to mention panic selling in our sector. Well, we certainly are living in interesting times. And not fun times. I decided to stay with my plans and went to Scotland for a bachelor party last weekend. No kidding. It was fun and was a great bonding experience with my future son-in-law. I hope he feels the same way. The return was hassle free, but it was a different country I returned to from what I left on Thursday night. School, restaurant, store and theater closings, to mention a few, plus shelter in place orders, added to the panic. And talk about panic. Senior care and healthcare REIT stocks were pummeled more than any other... Read More »
Collapse of Brookdale and Capital Senior Living Continues
We are officially in unchartered territory. It is now quite embarrassing that we stated two years ago, as Brookdale Senior Living’s share price dropped below $10, that it had reached a floor. Yes, hindsight is 20/20, but we don’t know anyone who really predicted how drastic it has actually become for senior living stocks. The question is, what to do now? The second question is, will it get worse? The day-to-day volatility in the stock markets is unprecedented. The day-to-day declines in values in our sector are even more unprecedented. It seems that when the major indices drop by 10%, our sector, including the REITs, drops by 20%. It is a magnification of the worries brought on by the... Read More »
Ventas Preparing For Worst
There is no way to mince words. When it comes to valuation, Ventas is a shadow of its former self. After being worth more than $20 billion, its market cap has dropped to just $7.8 billion. This compares with Welltower ($15.8 billion) and Healthpeak Properties ($11.8 billion). So much for the “Big Three” REITs. This is new territory for Ventas and its CEO, Debbie Cafaro. But who knows, maybe the Penguins will win the Stanley Cup this year, if there is one. Ventas, like Brookdale Senior Living, has withdrawn its 2020 earnings guidance. It stated that tours and move-ins at its operators are beginning to slow, even though the first two months of the year met previous expectations. What a... Read More »
Senior Care M&A Spending Hits Highest Level Since 2014
Total dollar volume did not break any records in 2019, but it was still the third-highest annual total ever recorded, and the highest since 2014 according to our just-published Senior Care Acquisition Report, 25th Edition. And that was without a single deal in the top-16 prices seen in the sector (2006 and 2014 had two and four, respectively). In fact, there were only two transactions valued above $1 billion: Ventas’ $1.8 billion purchase of Le Group Maurice’s Canadian seniors housing portfolio and KKR’s $1.75 billion acquisition of the Benchmark Senior Living portfolio from Welltower. However, the 2019 M&A market was larger and busier than people think, and that is... Read More »
Newmark Knight Frank Off and Running
The team at Newmark Knight Frank is off to a good start so far in 2020, doing equity, debt and sales transactions. In California, they closed just over $48 million in an equity raise for a new senior living development in the Los Angeles metro market. The community will total 336 units of independent living, assisted living and memory care. While technically not a CCRC, it is a rental community offering everything except skilled nursing, which seems to be where the market is heading these days. The total cost is estimated to be north of $200 million, or more than $600,000 per unit. While high, it is LA, where the difficulty for new development is well known. It is also quite a large... Read More »
Berkadia Arranged Two Bridge Loans
Berkadia announced two financings for a total of eight senior care properties. The first transaction saw the firm close a $15.25 million bridge loan for the acquisition of seven skilled nursing facilities located throughout the Midwest. Comprised of 426 operating beds, the portfolio was acquired by a first-time client of Berkadia’s. They obtained a two-year, interest-only term, and the non-recourse loan came in at 87% loan-to-cost that included $2.52 million for capital improvements. Senior Directors Ed Williams and Bianca Andujo arranged the transaction and ultimately plan to finance the loan through HUD. The other transaction was a $5.0 million refinance of a 36-unit assisted living... Read More »
Recent Senior Care M&A Deals, Week Ending March 13, 2020
Check out our recent senior care M&A deals! Long-Term Care AcquirerTargetPrice O&M InvestmentsSkilled nursing facility in Handford, CAN/A Not disclosed7 skilled nursing facilities$17.53 million BRIDGE HousingPaloma Del Mar... Read More »
CBRE Finances Orange County Senior Living Development
A senior living community is being built in California’s Orange County thanks to a bank loan arranged by CBRE. Located in North Tustin, the 100-unit community will feature 72 assisted living and 28 memory care units on a 7.5-acre infill site. The local market has high barriers to entry and an average home value in excess of $1 million within a one-mile radius. It took the developer, a joint venture between Clearwater Living and an institutional investor, 15 years to get this project off the ground due to tough zoning and entitlement processes and limited developable land in North Tustin. The opportunity must be worth the wait. To fund the project, Aron Will, Austin Sacco and Adam Mincberg... Read More »
JLL Lands Financing for Luxury Chicago Senior Living Project
The JLL team has secured both construction debt and joint venture equity for a joint venture to build a new luxury senior living community in Evanston, Illinois (Chicago MSA). Located on an irreplaceable 0.77-acre infill site just north of downtown Evanston, the nine-story project will consist of a mix of private independent living, assisted living and memory care units. It’s set to open in 2021 with a host of amenities that include multiple terraces with views of Lake Michigan. The total cost is estimated to be about $75 million, or $460,000 per unit. That’s a high figure, but given the location and Class-A finishes/amenities, we think the owners will be able to increase that... Read More »
O&M Investments Acquires California Skilled Nursing Facility
Following a busy 2019 with five announced acquisitions, O&M Investments just announced its third off-market transaction of 2020. The deal included a 124-bed skilled nursing facility in Hanford, California, which was acquired at a 12% cap rate (although no purchase price was disclosed). The facility underwent a full remodel three years ago, and occupancy consistently hovered around 90% across its 91 operational beds. O&M assumed the existing lease with the operator. Read More »Schedule a demo
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