Where There’s a Will, There’s a Waypoint
There’s a new entrant in the seniors housing industry. Real estate investment manager Waypoint Residential, predominantly focused on conventional multifamily and student housing, just made its first acquisition of a senior living community in the town of Starkville, Mississippi (home of Mississippi State University), for $22.7 million, or about $276,800 per unit. Developed in January 2016 by CR Properties, LLC and Blake Management Group, this community has 14 independent living, 43 assisted living and 25 memory care units. After already bringing occupancy to 100%, Blake Management Group will continue to manage the community. Josh Randolph of Colliers International represented the seller in... Read More »
M&A Values Dip
For the 12 months ended March 31, 2018, assisted and independent living average prices fell, while skilled nursing stayed the same as in 2017. After a record 2017 for assisted living average prices, for the trailing 12 months ended March 31, the prices have come down to earth, a bit. In this most recent period, the average price per unit fell 5% from calendar year 2017, to $210,100 per unit, and the unweighted average cap rate rose to 7.9% from 7.6%. This makes sense given rising interest rates and the continued market headwinds. The independent living market dropped by 9%, to $209,300 per unit, for the 12 months ended March 31, but I would assign less meaning to that because it is a much... Read More »
Blueprint’s Two Lone Star State Sales
Blueprint Healthcare Real Estate Advisors continues to impress in 2018, having just closed two more transactions to bring its yearly total to 21 deals announced, so far. Gideon Orion and Chris Hyldahl of Blueprint Healthcare Real Estate Advisors served up a South Texas sale in the town of Robstown, just outside of Corpus Christi. The buyer will have their hands full with this facility. Built in 1969, with a small renovation in 2010, its age did not help operations. As such, occupancy stood at 75%, and the facility operated at a 5.9% EBITDAR margin at the time of the sale. In came Messrs. Orion and Hyldahl, who represented the New York-based owner (with more than 150 skilled nursing... Read More »
Greystone Rocks Georgia Deal
The Greystone Real Estate Advisors team of Mike Garbers and Cody Tremper recently represented a REIT owner in its sale of a 57-unit assisted living community in Marietta, Georgia. The community was considered to be a value-add opportunity for the new owner, a joint venture between an institutional investor and Surpass Senior Living. Built in 1998, it was on the older side in the overdeveloped Marietta market and could improve operationally. But, the new owner plans to invest some capital in the building to spruce it up. No purchase price was disclosed. The deal comes on the heels of two large closings for Greystone north of the border, including Chartwell Retirement Residences’ purchase of... Read More »
Go Big Or Go Small In Seniors Housing?
Did size matter when it came to pricing a seniors housing (independent living and assisted living) community? Yes, it did, as the difference in average cap rates from the smallest communities (under 50 units) and the larger communities (90 units and above) grew to its widest gulf ever recorded (back to 2003) at 180 basis points, tying 2015’s difference, according to the 23rd Edition of The Senior Care Acquisition Report. Generally speaking, the smaller the community, the fewer economies of scale and the harder it is to generate significant cash flow, especially since the loss of one or two residents can have a more significant impact on the bottom line. Larger communities, including most... Read More »
Leaving the Land of Lincoln
Illinois is often cited as a state in which skilled nursing owners and operators do not want to do business in. Its uncertain reimbursement market and fiscal situation make for a risky investment, particularly outside of the more densely populated, higher income Chicagoland. That was the impetus for an owner/operator to sell its two Illinois skilled nursing facilities in the greater St. Louis area, with the help of Josh Salzman, Michael Segal and Ben Firestone of Blueprint Healthcare Real Estate Advisors. The exit wasn’t surprising for the previous owner, which had not intended to operate the facilities for the long term. The two facilities are both located in Edwardsville and combined for... Read More »
Building in Tampa Bay Area
The Tampa Bay seniors housing market continues to grow, marked most recently by a brand-new assisted living and memory care community developed by Pridgen Development and equity investor Lindell Investments, called Tessera of Brandon. The $28 million, 107,000 square-foot community in the town of Brandon was funded by a $21 million, five-year loan provided by Hancock Bank and designed by Bessolo Design Group to include a total of 138 units, 89 of which are assisted living apartments, and the other 49 units are for memory care, with several different floorplans available. Its per-unit cost (at $202,900) is above the average cost for like-projects in the area, which currently stands at... Read More »
Weighting the Seniors Housing Cap Rate By Units
The average seniors housing (independent living and assisted living, combined) cap rate resumed its downward trend that began after the Great Recession and strayed only one year (in 2016), hitting a new record low too, at 7.5%, according to the 23rd Edition of The Senior Care Acquisition Report. However, when weighted by units, the average seniors housing cap rate dropped even more significantly year over year, from 7.1% in 2015 (the previous record-low) to 6.6% in 2017, which was a full 90 basis points lower than the unweighted average for the year. What has changed year over year to merit such a drop? As always it comes down to the quality of properties sold during the year, with 2017... Read More »
Monticello Finances Skilled Nursing and Adult Day Care Acquisition
An experienced skilled nursing owner, whose principals have over 40 years of experience in the health care industry, obtained financing to acquire a skilled nursing facility and two adult day care facilities in New York. One of Monticello Asset Management’s investment vehicles originated $45.3 million in first lien debt financing for Nesconset Property NY LLC in anticipation of a HUD take-out down the road. The 242-bed SNF was built in 1984 and includes two respite beds, along with physical, occupational and speech therapies. The adult day care assets were built in 1993 and 1994 and combine for 165 chairs tied to the skilled nursing license. They operate one session per day, Monday through... Read More »
First Quarter Occupancy Down Again
Seniors housing occupancy levels dropped both sequentially and year over year, but new development continues. While it did not come as much of a surprise, the recently reported occupancy trends from NIC MAP were certainly disheartening. For occupancy at stabilized assisted living communities in the top 100 markets to drop 70 basis points from the previous quarter, and 117 basis points from the year-ago quarter, to 87.9%, it just makes us wonder why there is still so much new development in the ground, and in planning. Everyone thinks they have a better mouse trap, that their building is better, their staff will be better, the programs better….I could go on. The reality, however, is that... Read More »Schedule a demo
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