Assisted Living Values Break Record
With cheap and abundant capital in hand, and plenty of brand-new properties built during the recent construction boom hitting the M&A market in 2019, buyers pushed assisted living values to the highest per-unit average ever recorded. The average price for assisted living communities rose to $248,400 per unit, or 33% higher than 2018’s average of $186,400 per unit and 12% higher than the previous high of $221,250 per unit in 2017, according the the Senior Care Acquisition Report. The median price per unit also reached a new high of $233,183 per unit, or 54% higher than 2018’s median and 8% higher than 2017’s. So, what explains this significant jump? First, investor interest in seniors... Read More »
Reis Sells Stockton, California SNF
Rob Reis of Marcus & Millichap handled the sale of a 75-bed skilled nursing facility in Stockton, California, yielding multiple offers and ultimately closing over the asking price at $8.3 million, or $110,700 per bed. Mr. Reis represented the seller, a local single-asset owner that decided to sell the property to a new partnership looking to do business in California. Built in 1989 and renovated in 2009, the facility was occupied in the high-80s, with a quality mix around 20%. There are three private rooms and 36 semiprivate rooms on a 1.77-acre lot. It operated at a 15% margin on nearly $8 million of revenues and, under the previous tenant, generated more than $710,000 in triple-net... Read More »
Recent Senior Care M&A Deals, Week Ending February 28, 2020
Check out our recent senior care M&A transactions! Long-Term Care AcquirerTargetPrice Partnership buyerSkilled nursing facility in Stockton, CA$8.3 million Wingate Healthcare2 senior living communities~$43.6 million WI-based buyerSt. Clare Terrace$2.25 million Tryko Partners3 skilled nursing... Read More »
Ziegler Finances Wingate Healthcare Acquisition
Ziegler successfully closed $42.5 million in rental senior housing bonds, consisting of both taxable and tax-exempt bonds, to support Wingate Healthcare’s acquisition of two senior living communities in New England. The Pittsfield, Massachusetts community has 125 beds in 118 units, while the Providence, Rhode Island community has 96 beds in 93 units. Both offer assisted living and memory care services and were previously operated and leased by an affiliate of Wingate, which should make for an easier ownership transition. Wingate will also reposition the properties, including converting the previously closed skilled nursing beds at the Providence property into early-stage memory care units... Read More »
Live Oak Bank Closes Two Refinances
A couple of senior living communities refinanced with the help of the team at Live Oak Bank . In the first deal, KSL Seniors, a developer/owner focused on the western United States, secured a five-year loan with a floating interest rate to refinance its newly built 71-unit assisted living/memory care community in Greely, Colorado. Opened in Q4:19, the property is operated by Cadence Senior Living and offers common areas and amenities with an appeal to not only the community’s residents, but their extended families. The loan totaled $8.1 million and took out a construction line of credit. It also allowed KSL to recapture a line of credit capacity to pursue future projects. Then, Live Oak... Read More »
Lancaster Pollard’s Recent Fannie Mae Activity
Lancaster Pollard secured two Fannie Mae financings for senior living clients across the country. The first was an $11 million fixed-rate loan provided to a senior living community in Dover, Pennsylvania (York County). Featuring a mix of independent living, assisted living and memory care services, the one-story community has amenities such as gazebos, walking paths, a café and therapy suite offering occupational, physical and speech therapies. Miles Kingston, Doug Harper and Casey Moore led the transaction. Then, Messrs. Moore and Harper were joined by Grant Goodman to arrange a $7.2 million loan for a memory care community in Edmonds, Washington (Seattle MSA). Operated by Northwest Care... Read More »
PMB Turns Copper Into Gold
What do you do with a former copper mill that once produced 25% of the world’s copper but also produced substantial toxic waste? Well, after 30 years of remediation and being removed as an EPA Superfund site, you build a luxury senior living community, of course. That is exactly what San Diego-based PMB, a healthcare real estate developer and GenCare Lifestyle are planning in Tacoma, Washington. The two companies are developing GenCare Lifestyle at Point Ruston, a 144,000 square foot retirement community with 155 units. It is located in a mixed-use waterfront resort-inspired village on the southern edge of Puget Sound in Point Ruston, a master-planned urban... Read More »
Milwaukee Senior Care Complex Sells
A large (67,000 square feet) and old (built-in 1964) Residential Care Apartment Complex (“RCAC”) in Milwaukee, Wisconsin sold after falling on hard times. Known as St. Clare Terrace, it is made up of 59 units in a large building that sits on 2.4 acres. At the time of sale, occupancy was just 64%. The property was placed into receivership after the former not-for-profit owner/operator defaulted on their outstanding bonds. The receiver appointed BAKA Enterprises to manage the community until it was sold. Annualized revenues were just under $1.1 million, which would put average monthly rates close to $2,400. Before debt payments, there was a negative cash flow of about $175,000. Next... Read More »
Sabra Health Care REIT’s Private Pay Push
Sabra Health Care REIT has another 10 months to pull the trigger on its purchase option to buy the remaining 51% of Enlivant still owned by private equity giant TPG. Sabra closed on its 49% interest at the beginning of 2018, when occupancy at Enlivant was just 82%. This was a sharp improvement from the 60% census when TPG hired financially and operationally distressed Assisted Living Concepts in 2013. TPG brought in Jack Callison to run it and turn it around. Going from 60% to 82% in less than five years was no small feat, especially after the bridges that the former ALC management burned with several state regulators. When Sabra bought its 49%... Read More »
60 Seconds With Steve: Best Time to Borrow is Now
In 60 Seconds With Steve, he discusses that even with tumbling stocks, the best time to borrow would be right now. I guess the markets are finally taking the coronavirus seriously. The worst may yet to come, at least for the virus. Monday’s more than 1,000-point plunge in the Dow shocked a lot of people, but we need some perspective. That drop is just over 3%, not that much of a plunge when you put it into a historical perspective. On October 19, 1987, after just one year in the senior living business, I checked into a hotel in Pennsylvania for a state conference. I turned the TV on and saw the merely 508-point drop in the Dow on the screen. But that was a 22.6% plunge. Think of that:... Read More »Schedule a demo
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