Slowest Q4 For Senior Care M&A Since 2014
Despite a strong December, when we recorded 30 long-term care transactions, the fourth quarter of 2017 was slow by all recent standards. These are preliminary numbers and may be revised upward in the coming weeks, but with just 69 announced acquisitions, Q4:17 was the least active quarter in terms of number of transactions since Q2:14, when we recorded just 63 deal announcements. Compared to the previous years’ fourth quarters, 2017 fell short significantly, down from the 93 deals recorded in Q4:16 and from the 108 deals recorded in Q4:15 (the all-time high for a quarter). There were few high-priced deals, as well, with the largest of the quarter (Mainstreet’s $425 million acquisition of... Read More »
Sabra Health Care REIT Sells 20 More Genesis SNFs
After already announcing that it has put on the market 35 of its properties leased to Genesis Healthcare, Sabra Health Care REIT has successfully sold 20 of them to an undisclosed buyer for $103 million. The memorandum of understanding with Genesis to market and sell these 35 properties followed Sabra’s merger with Care Capital Properties and was aimed, clearly, at reducing the Sabra’s lease exposure to Genesis. With this deal, which featured skilled nursing facilities in Kentucky, Ohio and Indiana, Sabra’s annual rent from Genesis is reduced by $9.3 million. Plus, the deal is on top of the sale of four other facilities under the memorandum of understanding in the second half of 2017.... Read More »
Two 2018 Transactions From Senior Living Investment Brokerage
Senior Living Investment Brokerage rang in the New Year with two transactions closed, one on the west coast and one on the east. At a price of $1.5 million, or just over $23,000 per bed, a 65-bed skilled nursing facility in Cashmere, Washington sold to a regional owner/operator based in Idaho that is seeking to expand its presence in Washington State. Built in stages in 1962, 1976 and 1984, the facility was 91% occupied but losing money. It did, however, bring in nearly $3.9 million of annual revenue and the four-acre property provides room for expansion, so there is opportunity to add value. The buyers certainly left themselves some wiggle room with that price. Jason Punzel, Brad Goodsell... Read More »
Greystone Closes HUD Refinance For Large New York SNF
After working to close a $16.5 million HUD refinance for a 216-bed skilled nursing facility in Dunkirk, New York (Buffalo MSA) last month, Greystone’s Fred Levine closed another HUD loan for another large New York SNF. Located in Suffern, on the border with New Jersey, the facility consists of 203 beds and is the largest subacute care facility in Rockland County. Situated on six acres, it offers orthopedic rehab, cardiopulmonary rehab, wound care, concierge services and veterans programs, all under the management of CareRite Centers. To help fund renovations, and provide meaningful debt service savings, Mr. Levine arranged a $23.52 million HUD loan, with a fully amortizing 33-year... Read More »
Senior Care Stocks Swoon….Again
The 2017 Trump rally has left senior care and healthcare REIT stocks behind. It looks like the so-called Trump stock market rally is continuing into 2018. Weirdly, several senior care stocks shot up in the first day of trading yesterday. Where were investors last year? Unfortunately, 2017 was about as bad as it gets for our sector. Only one company posted an increase in price, and that was Kindred Healthcare, which is actually exiting our sector with its last sales of its SNFs. So, everyone else declined, and almost all of them by double digits, in a year when the rest of the market posted extraordinary returns. The NASDAQ Composite was up 28.2%, the Dow was up 25.1% and the S&P 500... Read More »
The Ensign Group Receives $112 Million In HUD Financing
Lancaster Pollard recently assisted The Ensign Group in a large $112 million portfolio financing arranged through HUD. The 30- and 35-year term loans were secured by mortgages on seventeen Ensign-owned properties and came with low, fixed interest rates. Ensign will use the loan proceeds to pay down previously drawn amounts on its revolving credit line, and the financing provides the company liquidity on a portion of its owned real estate. The proceeds will also fund future acquisitions and renovations, as well as other working capital needs. The company’s acquisition appetite seemed to wane slightly towards the end of 2017 (five deals announced in the first six months, versus two in the... Read More »
Not-For-Profit Buys Privately Owned Florida Community
Private to not-for-profit transitions certainly constitute the minority of senior care transactions, but it was nevertheless the case for a 190-unit independent/assisted living community that sold in Deland, Florida. Mike Pardoll of Marcus & Millichap represented the previous private owner/operator (who also developed the property), and sold the community to a 501-C3 for $19 million, or $100,000 per unit, with a 10.1% cap rate. The original seven-story 124-unit building was built in 1986, and a four-story (70-unit) addition was constructed in 1996, with a common area connecting the two buildings. Currently, four of the units are used for corporate purposes, lowering the total resident... Read More »
Assisted Living Buyer Bolsters Presence On Florida’s East Coast
Ken and Damien Carriero of Colliers International successfully closed the sale of a small 16-unit assisted living community in Vero Beach, Florida for $2.45 million, or about $153,100 per unit. Built in 2000, the community was family-owned and operated for the past 13 years. With more of a boutique-feel, it features all semi-private units and earned approximately $300,000 in annual net income, or about $18,750 per unit, per year. So, most units were double-occupied. The buyer owns and operates several other assisted living communities on Florida’s west coast, but just one other on the east coast (Fernandina Beach). So, this acquisition helps grow its presence on the Atlantic side. The... Read More »
Berkadia Closes In On $2 Billion Year
Heidi Brunet and Chris Fenton of Berkadia wrapped up their holiday season with a couple of financings for assisted living providers, bringing Berkadia Commercial Mortgage’s 2017 total to nearly $2 billion in loan production. First up, Ms. Brunet arranged a $25.6 million Fannie Mae loan, with a 10-year term and fixed interest rate, for a new borrower. The loan financed a portfolio of four assisted living/memory care communities all built in the early 2000s and totaling 288 units. Second, Chris Fenton worked on behalf of a joint venture (which included a New England-based operator) to finance their acquisition of a 54-unit assisted living/memory care community in New Hampshire. The $25.2... Read More »
Private Equity Purchases Alabama Independent Living Community
A private equity group based in Florida saw potential in a distressed independent living community in Montgomery, Alabama, acquiring the property for an undisclosed price. Occupancy was below 50%, but the property featured a number of amenities like large common areas, an outdoor patio and barbecue area, three courtyards, beauty/barber salon and a media room, among others. The buyer, which specializes in affordable seniors housing, will certainly have its hands full turning around the distressed asset. Brooks Blackmon and Trent Gherardini of Blueprint Healthcare Real Estate Advisors handled the transaction, and Blueprint’s General Counsel, Josh Salzman, managed the legal... Read More »Schedule a demo
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