JCH Gets High Price for Orange County Asset
JCH Senior Housing Investment Brokerage announced a big sale of a senior living community in Southern California in what is the second-largest single-asset transaction of 2019 (by price), so far. Totaling 214 units of independent living, assisted living and memory care, the community is located in the high barrier to entry Orange County. Occupancy was a strong 94%, and the community reported a remarkable 53% operating margin. It was previously owned by a national owner/operator, which decided to sell based on the current cap rate environment. Given the drop in average cap rates for both the assisted living and independent living markets, that reasoning makes sense. After a confidential... Read More »HJ Sims Heads to Hawaii for Latest Financing
Two skilled nursing facilities in Hawaii refinanced their debt and lowered their interest rate by about 60% in a transaction led by HJ Sims. The facilities, both located in Honolulu, consisted of 92 beds and 75 beds, respectively. Before this refinancing, they were collateralized with a single, high-interest rate bridge loan that had both a short term and expensive extension provisions. Sims Mortgage Funding (SMF) underwrote a $14.08 million loan through HUD to take out as much of the bridge debt as possible, resulting in a loan at about 80% of the estimated market value. The loan came with a 35-year term and a 2.05x debt service coverage ratio. In addition, to round out the capital stack,... Read More »
Ventas Reports Third Quarter Results
Ventas’ third quarter results are in and were less than optimal for its seniors housing operating portfolio (SHOP). Comparing the third quarter of 2019 with the same quarter in 2018, same-store cash NOI for its SHOP fell by 5.0%. Occupancy figures were not pretty either, with the quarter ending approximately 115 basis points lower than the end of the third quarter of 2018. The average third quarter occupancy compared with the average of Q3:18 was a less drastic 70-basis point drop. The company acknowledged that overbuilding in some markets led to price competition and pressure on revenues (a refreshingly honest admission when compared with other public companies), which contributed to the... Read More »
Recent Senior Care M&A Deals, Week Ending October 25, 2019
Check out our recent senior care M&A deals! Long-Term Care AcquirerTargetPrice Embassy HealthcareIsle HealthcareMerger Alabama-based owner/operatorSenior living community in ALN/A Sino-Ocean Capital/Meridian Senior LivingSymphony at the Waterways & Symphony of Boca... Read More »
Independent Living Values Continue Impressive Rise
As the assisted living market is mired in a difficult operating environment, plagued with overdevelopment in some markets, heavy discounting and stubbornly low census, independent living continues to show its resiliency. According the our rolling four-quarter pricing multiples, a product of The Seniors Housing Acquisition & Investment Report, investors paid an average of $272,300 per unit for independent living properties in the last four-quarter period ending this September. That represents a 6% increase from the average of the four quarters ended June 2019 of $257,800 per unit, and a 14% jump from the calendar year 2018 average of $238,100 per unit. So, what could cause such a... Read More »
Skilled Nursing Values Hold Steady
The skilled nursing M&A market has continued to surprise us. Despite numerous headwinds, especially involving the rising cost and scarcity of labor as well as the declining lengths of stay and census across the industry, buyers are still flocking to the sector. And as a result, they have kept values steady at just below $80,000 per bed. In the last four quarters ended September 30, skilled nursing facilities sold on average for $78,500 per bed, just slightly higher than the $77,500 per bed average price for 2018, according to The Skilled Nursing Acquisition & Investment Report. We should note this is a preliminary figure, as deals will inevitably float to the surface as the year... Read More »
Green Brick Partners Adds Atlanta-Area Age-Restricted Community
Age-restricted (or active adult or 55+) housing has been a popular investment target in the last couple of years, and Green Brick Partners, Inc., a residential land developer, is making a huge investment in a community to be built in the Atlanta, Georgia MSA. The company, though its subsidiary The Providence Group of Georgia, purchased a 115-acre tract of land with 4,000 feet on frontage along the Chattahoochee River to develop a 916-unit age-restricted community in the town of Peachtree Corners. Atlanta-based active adult land investment group East Jones Bridge, LLC is the joint venture partner for the project. The plan includes a mix of condos, townhomes and single-family homes for sale,... Read More »
Two Senior Living Communities Get Financing from Regions Bank
Regions Bank closed a couple of transactions in recent weeks for both a to-be-built senior living community and an existing one whose owners were looking to get a small cash-out. The $29.2 million construction loan was arranged for a joint venture between a Midwest-based developer/owner and a Southeast-based operator. Located in a fast-growing Alabama market, the community will consist of 105 independent living and 27 memory care units in a three-story building. Jack Boudler and Chris Honn secured the $29.2 million, or $211,000 per unit, loan, which came with a five-year initial term, four years of interest only, and a staged reduction in loan repayment recourse. Also, at or prior to... Read More »
Cambridge Realty Capital Arranges Refinance for Florida AL Community
Cambridge Realty Capital Companies successfully refinanced an assisted living community in Largo, Florida (St. Petersburg MSA). The 63-bed community, which is owned by a Florida limited liability company, obtained a $4.1 million HUD loan with a fully amortizing 33-year and eight-month term. Amenities at the pet-friendly community include a hair and nail salon, library and gardens with walking paths. It also provides in-house therapy with Fusion Healthcare. Autumn Senior Living manages the community. This transaction was one of eight HUD Lean refinances that Cambridge closed in the previous HUD fiscal year, with a total of $80.8 million in volume. Read More »
The Pennant Group Debut
The Pennant Group is The Ensign Group’s latest spin off. If history repeats itself, the new company will succeed. It has been three weeks since The Pennant Group was spun out of The Ensign Group as a separate publicly traded company. This is not Ensign’s first rodeo when it comes to successful spin outs. Five years ago, it spun out the majority of its real estate assets (and mostly skilled nursing) into CareTrust REIT, which has been among the leaders in shareholder return among healthcare-oriented REITs. As Ensign grew its senior living and home health and hospice business, management decided that shareholders would benefit from higher valuation multiples if these assets were spun... Read More »Schedule a demo
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