The Warning Signs Were There
With assisted living occupancy now at an eight-year low, the reasons seemed very obvious a few years ago. I am a hoarder. I like to keep reports, articles, magazines and anything else of interest pertaining to seniors housing and care. So, last night I was cleaning up some papers stacked in my office and came across one of Jerry Doctrow’s first blogs since retiring from Stifel Nicolaus in 2015. Dated January 6, 2016, it was called, “Why Near-Term Trends Could Spell Trouble for Senior Housing.” As I re-read it, all I thought was, why didn’t more people see the problem back then? NIC MAP had just come out with its most recent quarterly data on occupancy and construction, and while not... Read More »
Live Oak Bank Growing Its Senior Care Business
Still just less than a year after forming its senior care lending division (and hiring Adam Sherman of Blueprint Healthcare Real Estate Advisors as the new division’s industry expert), Live Oak Bank closed two more loans for seniors housing properties. First, working on behalf of a local owner/operator in Georgia, Live Oak provided a $5 million SBA 7a loan and a companion balance sheet loan to fund the construction of a 60-unit assisted living/memory care community in the town of Cartersville. The loans came with floating rates and fully amortize over 25 years, with no balloon payments. For the developer, this isn’t their first rodeo in northwest Atlanta (a market we have heard has seen... Read More »
HHC Finance Sizzles This Summer
The Capital Advisory Group at Housing & Healthcare Finance (HHC Finance) has impressed so far this summer, closing $157 million across eight loans in the last two months. Isaac Haas and Neil Gamss, who lead the group, went to Pennsylvania to close the largest transaction. Vita Healthcare Group was the borrower, after acquiring eight skilled nursing facilities and 1,050 total beds that were deemed to be non-core by the undisclosed seller, in a transaction handled by Ben Firestone, Christopher Hyldahl, Michael Segal and Gideon Orion of Blueprint Healthcare Real Estate Advisors. HHC Finance closed a $100.3 million bridge loan to fund the purchase. For another skilled nursing portfolio... Read More »
Capital One Refinances Massachusetts Skilled Nursing Portfolio
Just 18 months after they were purchased, three skilled nursing facilities in Massachusetts refinanced through HUD, with the help of Joshua Rosen of Capital One. The 2016 transaction involved these three facilities in Chelsea (195 beds), Fall River (152 beds) and Brockton (169 beds). There was a fourth facility involved in the sale that is not being refinanced in this transaction. Two principals who are experienced owner/operators of SNFs mainly in the Midwest ended up as the buyers, financing that deal with bank debt. Now, through Capital One, they received three fixed-rate loans, each with a 35-year term, totaling $47.2 million through HUD to refinance the portfolio. Read More »
Despite Declining Operations, Minnesota Skilled Nursing Facility Sells
It looks like Ray Giannini (of Marcus & Millichap) isn’t taking a vacation this summer, as he just closed the sales of a skilled nursing facility in Minnesota and a senior living community in Iowa. The Caledonia, Minnesota facility has a long history serving the health care needs of the area. Originally opened in the early 1900s as a hospital, the building expanded in 1962 and 1976, and now features 50 skilled beds, as well as a 16-unit assisted living community (added in 1987). Plus, the SNF was extensively renovated in 2012 at a cost of $1.4 million. Services there include physical, occupational and speech therapy programs, along with respite and hospice care. However, while the AL... Read More »
Continuum of Care Sells in Washington, D.C.
Healthcare Transactions Group managed to sell not only the operations of a 230-bed skilled nursing facility in Washington, D.C., but also a home health agency and a nursing school too. Annual revenues for the combined business totaled about $25 million, and census at the SNF was nearly full, at 98%. Also based in D.C., the home health agency is licensed for both Medicare and Medicaid patients, and the nursing school primarily trains CNAs and home health aides. That must help with staffing, which in turn may help in maintaining that 98% occupancy. The buyer, a Brooklyn, New York-based regional operator with several other skilled nursing facilities in Washington, D.C., did not purchase the... Read More »
CBRE Rocks Plymouth, Michigan Deal
After opening in 2017, and already filling up, a senior living community in Plymouth, Michigan (Detroit MSA) refinanced its construction debt with the help of Aron Will of CBRE. Developed by a joint venture between Boston-based private equity firm Blue Moon Capital Partners and Troy, Michigan-based operator Cedarbrook Senior Living, the community features 98 independent living, 43 assisted living and 41 memory care units, in addition to 19 IL cottages. It was developed at an approximate cost of $45 million, or around $225,000 per unit, which is slightly above the regional average for senior living communities of $215,000 per unit, according to our in-house database of developments dating... Read More »
Monticello’s Kentucky Closings
To fund its acquisition of two skilled nursing facilities in Kentucky, an investor turned to Monticello Asset Management to arrange financing. Two of Monticello’s investment vehicles originated $8.375 million in first lien debt financing and a $1.5 million working capital loan on behalf of the buyer, Healthcare Management KY, LLC. The two facilities total 139 skilled nursing beds (147 licensed beds) and eight personal care beds, and average over 20-years old. One of them was renovated in 2014, receiving a brand-new 2,500-square foot rehab gym. The new owner, whose principals have over 10 years of combined experience in the health care industry, expects to eventually refinance with... Read More »
Skilled Nursing Staffing Woes
Another front page New York Times story highlighting problems with skilled nursing facilities. I am sure many of you saw the recent New York Times article about understaffing in the nation’s nursing facilities, particularly on the weekends. The new methodology used, based on actual payrolls obtained by Medicare, indicates that staffing is 12% lower than using the previous methodology, which was based on self-reporting. The article used one small nursing facility in New York as an example of weekend staff shortages. Anecdotally, my next-door neighbor’s mother was in a local assisted living community operated by a prominent national chain, and she always complained about the “Sunday dump... Read More »
To Be Public Or Not
There are a lot of people who do not believe seniors housing and care companies should be publicly traded. It is not appropriate to try to manage quarterly revenues and profits when you are taking care of older, frail residents. And don’t forget the earnings disruptions that can be caused by new developments and the ongoing depreciation expense if you own your real estate. It is just difficult to please investors and analysts with all the variables, including external ones that you have no control over, or so the argument goes. And then there is the roller coaster of daily stock prices. Take Genesis Healthcare, as an example. This past Monday, its price plunged by as much as 19% on trading... Read More »Schedule a demo
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